Is Now the Time to Buy Micron Technology Stock?

The artificial intelligence (AI) market has exploded over the past year, and among the businesses benefiting from this growth is Micron Technology (NASDAQ: MU). The company’s sales are soaring because AI systems require lots of computer memory and storage, exactly the products Micron specializes in.

This led to an amazing run-up in the company’s share price. Last July, Micron stock was at a 52-week low of $60.50. Fast-forward a year, and shares more than doubled to hit a high of $157.54 in June.

But after announcing results for its fiscal third quarter, ended May 30, Micron’s stock price plunged. Does this create an opening to buy shares, or does the price drop suggest a reason to avoid investing in Micron?

Here’s a look into the company’s performance to answer those questions and determine if Micron is a worthwhile investment over the long run.

Micron’s financial performance

Micron’s post-earnings share price decline was due to its fiscal Q4 financial forecast failing to impress Wall Street. The company estimated Q4 revenue to come in around $7.6 billion, which is a 90% increase over the prior year’s $4 billion.

To put this guidance into context, here’s how Micron’s revenue has fared over its fiscal 2024.

Fiscal Quarter

Revenue

YOY Change

Q4 2024

$7.6 billion (company guidance)

90%

Q3 2024

$6.8 billion

82%

Q2 2024

$5.8 billion

58%

Q1 2024

$4.7 billion

16%

Data source: Micron Technology. YOY = year-over-year.

As you can see, Micron’s revenue has been growing every quarter this fiscal year, thanks to the customer demand generated by the advent of AI. And looking deeper at Micron’s fiscal Q3, performance was solid across multiple financial metrics.

The company’s Q3 free cash flow (FCF) of $425 million is a substantial reversal from last year’s negative FCF of $1.4 billion.

In addition, Micron exited Q3 with a healthy balance sheet. Total assets were $66.3 billion with $7.6 billion in cash and equivalents. Total liabilities were $22 billion.