Micron Technology Stock Is Cheaper Than the S&P 500 and the Nasdaq-100. Here's Why I'm Still Not Buying It.
Shares of a company growing as fast as Micron is would normally trade at a premium.
Overview
Micron Technology (NASDAQ: MU) is one of the world's three top suppliers of memory chips, which play a critical role in the artificial intelligence (AI) hardware stacks in data centers, computers, smartphones, and even cars. There is a worldwide shortage of memory right now, which allows the manufacturers to dictate prices. For Micron, this resulted in a staggering 1,368% year-over-year increase in earnings to $24.67 per share during its most recently reported quarter.
A company growing at such a blistering pace would normally be expected to command a sky-high valuation as investors pile into its stock to get ahead of future potential returns. And investors have bid the stock up: Micron is sitting on a 12-month gain of around 640% -- but it's actually still trading at a steep discount to the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq-100 indexes by one traditional valuation metric.
Details
Normally, I would consider a stock like Micron to be a bargain at the current price. But here's why I'm not a buyer right now.
Source
Originally published at www.fool.com.