Shares of Micron (MU) fell in today’s trading after investment research firm Hedgeye added the chipmaker as a new short idea, meaning it expects the stock to drop further. Hedgeye analyst Felix Wang believes Micron has little room for growth in Fiscal Year 2025, particularly in its second quarter, which ends in February, and thinks management is trying to lower expectations for that period.
Hedgeye is also worried about a potential oversupply of high-bandwidth memory (HBM) next year, especially if Samsung (SSNLF) solves its current production issues, which would add pressure to Micron. At the same time, there’s no sign of recovery for the NAND flash memory segment, as inventory issues and weak demand in consumer markets make things even tougher.
Furthermore, even though Micron’s guidance for its non-AI segments was better, Wang is still doubtful that the company will be able to rebound in 2025 due to its ongoing challenges. More specifically, he stated that “inventory issues remain on poor demand from certain consumer end markets.”
Volatility Creates Opportunities
Micron stock has had a volatile trading year after hitting a record high of $153 in June, only to drop over 40% to $86 by August. However, it has since recovered some of those losses and trades around $109 per share. Still, for investors who can stomach the ups and downs, volatility can create opportunities. Indeed, TipRanks contributor Michael Byrne believes that Micron is a cheap way to invest in semiconductor stocks.
He believes that Micron’s deceptively cheap valuation, strong forward guidance, and overwhelmingly favorable analyst outlook are good reasons to be bullish on the stock.
Is MU a Good Stock to Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MU stock based on 22 Buys, one Hold, and one Sell assigned in the past three months, as indicated by the graphic below. After a 28% year-to-date rally, the average Micron price target of $148.68 per share implies 36.3% upside potential.
