Why Wall Street Keeps Underestimating Micron
2026-07-31 19:30
•Marc Guberti •The Motley Fool
•••••• • Axe Cap view
Micron’s AI Bet Looks Undervalued by Wall Street
Micron’s strong growth and solid customer contracts clash with fears of a chip glut, creating opportunity.
Micron Technology’s recent earnings showcase a company riding the AI wave, not drowning in old inventory issues. The firm’s revenue has quadrupled year-on-year, and it expects another 20% jump next quarter. Why does the stock remain down nearly 30% from its peak? Wall Street is stuck worrying about a memory chip inventory glut that hit in 2023. However, this misses the shift: Micron now has multiyear agreements with major customers, offering stable revenue streams beyond the usual cycle swings. The AI boom—growing at a 30% annual rate—means data centers need huge amounts of memory, and Micron is well placed to supply this. For South African investors, the link is more in USD/ZAR, which could strengthen if tech-driven dollar inflows continue. But, if AI adoption slows or economic conditions deteriorate globally, demand could falter and pressure chip prices. this is just our opinion and not financial advice
Watch Micron for a rebound tied to AI-driven demand, but exposure should be moderate due to cyclicality; consider USD/ZAR as a hedge on emerging market flows.
- MU
- USD/ZAR
- Slower-than-expected AI infrastructure growth
- Global economic slowdown reducing tech spending
6/10
Micron Technology quadrupled its revenue year-over-year and guided to $50 billion in Q4 revenue with 20%+ sequential growth, yet the stock has fallen 27% from all-time highs. Wall Street fears a repeat of fiscal 2023's inventory glut, but the company's new multiyear Strategic Customer Agreements and strong AI infrastructure demand suggest these concerns are overblown. With AI projected to grow at 30.6% CAGR through 2033 and tech giants aggressively expanding data centers, Micron's memory chips remain central to the AI boom.
Our take is based on reporting first published by The Motley Fool.