Micron Technology Stock: Is It a No-Brainer Buy at Less Than $900?

Has the bubble burst for Micron Technology (NASDAQ:MU)? That's what many investors may be asking right now, as the tech company, which has been experiencing significant demand for its memory and storage products over the past year, has suddenly fallen out of favor with investors. It's been falling sharply in recent days, and last week, it fell below $900.

It's now trading at levels it hasn't been at since August, and the concern is that this may be the beginning of an even greater decline ahead, particularly as the market has been growing concerned about an artificial intelligence (AI) bubble.

But with Micron trading at a low valuation with respect to profits, and demand remaining robust, is the market overreacting, and could Micron actually be a no-brainer buy while it trades below $900?

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Micron's impressive growth attracts plenty of attention but also may be difficult to sustain

There's no denying Micron's results have been stellar in the past year. Not only has revenue been through the roof, but so too have earnings. The growth has been exceptional, making it little wonder why the stock has surged over 1,000% in the past five years. The big concern is whether the company can keep on generating such impressive growth in the long run.

MU Net Income (Quarterly) data by YCharts

The answer is not necessarily clear. While demand appears insatiable and prices for its products keep going up, there have been flags raised that a bubble may burst soon, with famed investor Michael Burry being one of the more prominent critics, believing that "the bubble in AI may burst sooner than later." Many investors, thus, may be heading for the exits and cashing out profits before that happens.

But is that a mistake?

The stock may be enticing for growth investors, but it's not a no-brainer buy

Micron looks incredibly cheap, as it's trading at just seven times its estimated future earnings (based on analyst expectations). But expectations can change, and if the outlook worsens for Micron due to more supply becoming available sooner rather than later, that would adversely impact its share price and could send it into a deeper tailspin.

It's difficult at this stage to know how long the strong growth will last for Micron. It could very well prove to be a good buy right now due to the incredibly strong demand for memory and storage products, but this is not a slam-dunk buy or a stock I'd simply buy and forget about, given that so much depends on expectations.

For growth investors who are considering buying Micron's stock today, it'll be important to keep a close eye on market conditions, as things could change quickly.

David Jagielski, CPA 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.