Why Micron Stock Bounced Back Friday

Micron stock experienced volatility throughout the week, with a significant 26% drop by Thursday's close. However, by Friday morning, the stock has regained some of its value, with a 6.3% increase at 10:25 a.m. ET. The recent election results have led to Democrats gaining control of both the U.S. Senate and the House, and winning governorships in four states where data center construction is most active.

While some investors may be concerned that a Democratic majority could negatively impact AI and data centers, there is also the possibility that these developments will not significantly harm Micron's stock price. Citigroup predicts that memory companies will increase production by 22% in 2027, while demand grows by 26%, maintaining a supply-demand imbalance that should support sales and high memory prices.

Analyst KC Rajkumar at LYNX Equity Strategies agrees, noting that supply shortages, particularly in memory and flash markets, remain tight, and Asian markets show no sign of sales drop-off. In the long term, there is a risk that the AI tide could turn against data centers, but in the near term, Micron's growth appears secure. With Micron trading at less than 5 times its expected profits in 2027, it could be a good investment opportunity.