Micron Technology (MU) stock has surged 35.5% over the past 21 trading days, driven by a wave of dealmaking aimed at expanding large-scale AI data centers. This build out is expected to fuel strong demand for high-bandwidth memory used in AI chips, helping suppliers like Micron. Adding to the optimism, the company’s peer SK Hynix recently forecast a “super cycle” in demand for memory driven by artificial intelligence.
BEIJING, CHINA – 2025/07/18: The illuminated “Micron” logo at the 3rd China International Supply Chain Expo. The third edition of CISCE has brought together more than 650 companies and institutions from 75 countries and regions said the China Council for the Promotion of International Trade the organizer of the expo. (Photo by Sheldon Cooper/SOPA Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images
Currently, the stock appears to be fairly priced. Consider these data points:
- Size: Micron Technology is a $249 Bil company with $37 Bil in revenue, now trading at $221.91.
- Fundamentals: Revenue growth of 48.9% over the last 12 months, alongside an operating margin of 26.2%.
- Liquidity: Maintains a Debt to Equity ratio of 0.06 and a Cash to Assets ratio of 0.12.
- Valuation: Micron Technology stock is presently trading at a P/E multiple of 29.2 and a P/EBIT multiple of 24.6.
- Has delivered a median return of 23.6% in the year following sharp declines since 2010. Refer to MU Dip Buy Analysis.
While we appreciate riding the momentum if the fundamentals are sound – for MU, refer to Buy or Sell MU Stock – we remain cautious of potential bull traps. It’s particularly important to ponder if worst-case scenarios arise, such as MU falling 20-30% to the $155 levels; would we be able to hold onto the stock? What does the worst-case situation look like? We term this downturn resilience. Notably, the stock has performed significantly worse than the S&P 500 index during various economic downturns. We evaluate this based on (a) the magnitude of the stock’s decline and (b) the speed of its recovery.
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Below are the details, but first a brief background: MU produces memory and storage products, which include DRAM semiconductor devices, via segments that focus on compute, networking, mobile, storage, and embedded business units.
2022 Inflation Shock
- MU stock dropped 49.8% from a peak of $97.36 on 14 January 2022 to $48.88 on 26 September 2022, compared to a peak-to-trough decline of 25.4% for the S&P 500.
- Nonetheless, the stock fully bounced back to its pre-crisis peak by 7 March 2024.
- Since that recovery, the stock has risen to a high of $221.91 on 28 October 2025
2020 Covid Pandemic
- MU stock declined 42.5% from a high of $59.99 on 19 February 2020 to $34.47 on 16 March 2020, against a peak-to-trough drop of 33.9% for the S&P 500.
- However, the stock completely regained its pre-crisis peak by 16 November 2020.
2018 Correction
- MU stock experienced a decline of 53.7% from a peak of $62.62 on 29 May 2018 to $29.02 on 24 December 2018, compared to a peak-to-trough fall of 19.8% for the S&P 500.
- Nevertheless, the stock completely recovered to its pre-Crisis peak by 23 November 2020.
2008 Global Financial Crisis
- MU stock crashed 88.1% from a peak of $14.23 on 12 January 2007 to $1.69 on 20 November 2008, compared to a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully regained its pre-Crisis peak by 27 June 2013.
It is important to consider how low MU might drop during a market downturn. Additionally, you should assess how the stock performed in comparison to the Trefis High Quality (HQ) Portfolio, which consists of 30 stocks and has a history of consistently outperforming its benchmark that includes all three—the S&P 500, S&P mid-cap, and Russell 2000 indices. What accounts for this? As a collective, HQ Portfolio stocks have delivered superior returns with reduced risk relative to the benchmark index; providing a less volatile experience, as demonstrated in HQ Portfolio performance metrics.
