Key Points
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Micron stock closed Thursday down 26% for the week.
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Wall Street analysts see little sign of a let-up in computer memory demand, however.
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Long term, Micron may (or may not) have a problem. Short-term, its future looks secure.
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Micron (NASDAQ:MU) investors had a rough week, no doubt about it — but things are getting better.
A major player in both DRAM and NAND flash memory production, Micron stock shed 26% through Thursday’s close. As of 10:25 a.m. ET Friday morning, however, the stock is bouncing back 6.3%.
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Why?
Image source: Getty Images.
Are data centers in trouble?
The answer is: Data centers.
Election 2026 put Democrats in control of both the U.S. Senate and the House and installed Democratic governors in all four states where data center construction is most active. If investors are operating on the theory that Democrats as a whole are hostile to AI and data centers, then it makes sense to worry that data center construction will slow down, the sale of memory chips needed to build those data centers will slow also — and Micron stock will fall.
But there’s also a chance that none of this will happen — or that if it does, it still won’t hurt Micron that much.
What’s next for Micron
After all, according to Citigroup, 2027 will see memory companies increase production by 22%, while demand grows by 26%, maintaining a supply-demand imbalance that should spur sales and keep memory prices high.
This morning, analyst KC Rajkumar at LYNX Equity Strategies seconded that sentiment, confirming that supply shortages, particularly in memory and flash markets, remain tight, and that Asian memory and flash markets aren’t showing any drop-off in sales post-election — at least not yet.
Granted, in the long term, there’s a risk that the AI tide could turn against data centers, slowing Micron’s growth. In the near term, however, at least through 2027, Micron’s future looks secure. Trading for less than 5x the profit it’s expected to earn in 2027, Micron looks almost too cheap not to buy.
Should you buy stock in Micron Technology right now?
Before you buy stock in Micron Technology, consider this:
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.
