‘Don’t Be Late to the Party,’ Says Top Investor About Micron Stock

Micron Technology (NASDAQ:MU) has been falling, hit hard by recent revelations that could decrease the amount of memory needed to power AI workloads. To be fair, however, MU started its descent even before Google TurboQuant upended the memory market.

The trigger appears to be Micron’s most recent quarter, as the stock has sunk by more than 20% since the March 18^th earnings report. Must have been quite a doozy of a quarter, huh?

It was, actually, a remarkable earnings report, though a highly positive one. The company, in fact, blew past expectations to deliver unbelievably bullish numbers. Micron’s quarterly revenue was $23.9 billion, a 75% sequential increase and up 196% year-over-year.

Meanwhile, it appears that things are only heating up, as management guided for revenue of $33.5 billion in the current quarter (exceeding consensus estimates by roughly $10 billion!) and gross margin north of 80%.

And yet, MU has been slipping. The stock hasn’t been able to shake worries about the cyclical nature of the memory business, and the recent developments from Google aren’t helping matters.

Top investor Oliver Rodzianko argues that it all boils down to how much risk one is ready to stomach.

“The question at the front of my mind is all about risk appetite,” explains the 5-star investor, who is among the top 1% of stock pros covered by TipRanks.

Rodzianko readily admits to preferring stocks that aren’t high beta or heavily exposed to cycles such as semiconductors. This makes him less keen to go all-in on MU, especially when he foresees a re-rating on the horizon.

Nevertheless, the investor still believes that the company’s product roadmap supports a bull case, and that Micron isn’t ceding the high-value end of the stack. Rodzianko therefore advises sentiment investors to focus on the supply.

“That’s the crux of Micron stock. You can say you need to know more than that, but you don’t,” he adds.

While demand is outpacing supply, the investor argues that this won’t always be the case. And once that occurs, prices will fall, earnings will falter, and Micron’s share price will “crater.”

Rodzianko isn’t sure when that will take place, but he doesn’t want to wait around to find out.

“Don’t be late to the party; it’s never a good strategy for long-term success,” concludes Rodzianko, who gives MU a Hold (i.e., Neutral) rating. (To watch Oliver Rodzianko’s track record, click here)

Wall Street sees the party continuing for quite some time. With 26 Buys and 2 Holds, MU enjoys a Strong Buy consensus rating. Its 12-month average price target of $536.55 points to an upside of 50%. (See MU stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.