Micron Is Down 17% Over the Past Month. Is This AI Stock Still a Buy?
Despite AI spending fears, Micron's business is booming.
Micron Technology (MU) has experienced a 17% decline over the past month, raising concerns about its viability as an AI stock. This decline is attributed to various factors, including rising interest rates, fears of overspending on AI, and concerns about regulation. The company's memory chips are in high demand in AI data center infrastructure, but some investors worry that AI companies are spending too much on their build-outs, potentially slowing growth.
However, recent quarterly results from Microsoft, Alphabet, and Amazon suggest that AI spending is paying off, with these tech giants showing strong revenue growth driven by their investments in AI infrastructure. Micron's management expects memory demand to continue outpacing supply, leading to revenue guidance of $61.5 billion for first-quarter 2027, a 350% increase from the same period last year.
While there are concerns about potential market share loss to competitors like ChangXin Memory Technologies, Micron's current momentum and long-term prospects make it a worthwhile investment despite the recent risks.
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