After a new round of selling, Micron Technology, Inc. (MU.US) welcomes a good opportunity for "buying the dip"?

Notice that over the past week, investors in Micron Technology, Inc. (MU.US) have experienced a difficult period. After investors pushed Micron Technology, Inc.'s stock to its peak in June 2024, the company has entered a bear market. In fact, considering the lackluster guidance provided in Micron's recent earnings report released in December, the hit that investors have suffered this week does not seem as bad. This leading American memory chip manufacturer is widely considered the best "defense mechanism" the United States has against leading Korean memory companies like SK Hynix and Samsung. However, the memory industry is inherently cyclical. Looking back on the ups and downs in Micron's memory business over the past decade. From revenue growth reaching its peak in the 2017 fiscal year, to entering a negative revenue growth cycle in the 2019 fiscal year (pre-COVID-19). Then, as Micron and its peers launched an offensive, taking on more production risks and believing that prosperity could be sustained, the COVID-19 pandemic bubble took center stage. High Bandwidth Memory (HBM) chips are currently driving the memory industry trend. Samsung has failed to catch up with Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR in terms of logic AI manufacturing, while losing its first-mover advantage to SK Hynix, resulting in a change in management. Therefore, Micron's position in the HBM value chain is both opportunistic and unstable. Micron Technology, Inc. bets on AI chips Micron emphasizes that data center revenue currently accounts for over 50% of its overall revenue base. This is higher than the previous year's 20%, while management emphasizes poor performance in Micron's non-AI business. What's worse, they are not expected to see a stronger recovery until the second half of 2025. This will increase pressure on Micron, which hopes for a surge in AI speculation in the next two years, while facing higher concentration risk on its reliance on NVIDIA Corporation. In other words, if NVIDIA Corporation's growth slows down, Micron Technology, Inc. may have to face liquidation at the same time. Additionally, the market should not forget about Samsung. It is catching up with SK Hynix and Micron Technology, Inc. Getting recognition from NVIDIA Corporation is essential for Micron. AI investors know that NVIDIA Corporation is ready to mass-produce Blackwell, focusing on solving early issues with production and delivery to end customers. Therefore, NVIDIA Corporation must ensure that there are no memory chip obstacles that could potentially impact delivery pace and jeopardize Wall Street's optimism towards the company. Appealing valuation The market has lowered the valuations of the three leading memory chip manufacturers. Micron's Korean counterparts have suffered more, while being dragged down by the overall "Korean discount" in the stock market. From a high point of $153 to below $90 currently, Micron's current valuation is very appealing (expected PEG ratio under non-GAAP accounting standards is 0.36). As long as Micron's cyclical business can improve in the second half of next year, these weaknesses are likely already priced in. Furthermore, there is little indication that Micron's confidence in its HBM business is threatened by Samsung or SK Hynix, as NVIDIA Corporation aims to ensure the security and diversification of its supply chain. While competition is expected to escalate as Samsung seeks to enter the AI race, Micron's product and technological leadership should help maintain the company's leading position. Investors who missed the opportunity to buy in at the bottom in 2022 should not miss this opportunity.