Micron Technology just delivered a reminder that even the hottest AI trades can get volatile — and that volatility may be creating an opening. Shares plunged 28.7% in July before staging a rebound in August, and the stock now trades at a trailing price-to-earnings ratio of about 19, far below the broader tech sector’s average multiple of 35. That gap is notable given Micron sits at the center of one of the tightest supply crunches in the chip industry: memory prices have been climbing for months as AI data centers gobble up an outsized share of global DRAM and NAND production.
The supply squeeze shows no signs of easing soon. Micron’s own management believes the memory shortage will persist at least through 2027, while rival SK Hynix has gone even further, suggesting tightness could last through 2030. Apple CEO Tim Cook recently confirmed the pressure is real, telling investors he expects memory prices to stay elevated — a big enough deal that Apple has already raised prices on several devices directly because of higher component costs. In a sign of just how tight the market has become, Apple is reportedly testing memory chips from China’s CXMT, a homegrown DRAM manufacturer, as it looks to diversify away from the Samsung-SK Hynix-Micron trio that has historically dominated global supply.
For investors, the setup is straightforward: Micron is a direct beneficiary of AI infrastructure spending, and the current valuation discount versus tech peers looks tough to justify given the demand backdrop. Memory suppliers with capacity already sold through 2027 have real pricing power, and that dynamic should keep flowing into Micron’s margins even if near-term shares stay choppy. Investors comfortable with volatility may want to view pullbacks like July’s as buying opportunities rather than reasons to avoid the stock — just size positions knowing memory-chip stocks can swing hard in both directions around earnings and guidance updates.
