Micron Broke Below Its 50-Day Moving Average. Should You Buy the Dip?

Micron (MU) shares remain under pressure on March 25 as investors react to the company’s massive tender offer for senior notes and Google’s release of a new quantization algorithm, TurboQuant. The selloff forced MU to break below its 50-day moving average (MA), indicating the momentum is finally turning in favor of the bears now.

Following today’s drawdown, Micron stock is down roughly 17% versus its year-to-date high. 

Why Micron Stock Slipped on Wednesday

The TurboQuant news is dovish for MU shares as Google claims it can trim large language models’ (LLMs) memory requirements by up to six times.

For Micron Technology, which has thrived on the promise of infinite artificial intelligence demand, this could prove a threat to long-term volume growth. 

Adding to pressure on Wednesday is the company’s $5.4 billion cash tender offer to repurchase senior notes due between 2031 and 2035. 

While debt reduction is healthy, the market is treating management’s renewed focus on strengthening the balance sheet as a hint that the AI-enabled “supercycle” may be headed for a peak. 

Where Options Data Suggests MU Shares Are Headed

Despite the technical breakdown, Micron’s fundamental story remains compelling as ever. At about 10x forward earnings, the Nasdaq-listed firm is attractively valued compared to its semiconductor peers, especially given its expectations for a continued increase in gross margin to 80% in the current quarter. 

Additionally, options pricing signals a bullish skew as well. According to Barchart, the upper price on contracts expiring mid-June sits at about $459, signaling potential for a 20% rally within the next three months. 

Earlier this month, Micron raised its dividend by about 30%, which makes it even more attractive for income-focused investors. 

How Wall Street Recommends Playing Micron

Investors could also take heart in the fact that Wall Street analysts remain bullish on MU stock for the next 12 months. 

According to Barchart, the consensus rating on Micron Technology sits at a “Strong Buy” currently, with price targets as high as $750, indicating the AI firm could nearly double from here by the end of 2026. 

On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.