This Growth Stock Is Down 20% in the Great Rotation. I Think That's a Mistake.

By Geoffrey Seiler – Apr 4, 2026 at 9:00AM ESTKey PointsMicron's stock got hammered in the "Great Rotation."But investors may be focusing on the wrong thing.Artificial intelligence (AI) stocks have been leading the market higher for the past few years, but investors hit the emergency brake in 2026, sending many tech stocks suddenly tumbling. The move into value and small-cap stocks after years of underperformance by itself isn't necessarily a bad move. There are some great bargains in the space. But this rotation has also left the tech sector with some screaming bargains. Perhaps the best of the bunch is Micron Technology (MU 0.49%), which has been absolutely punished despite reporting an incredible earnings report last month and issuing robust guidance. The nosedive in the stock has left it trading at a forward price-to-earnings (P/E) ratio of under 4 times fiscal 2027 (ending in August) analyst estimates. That's an insanely cheap valuation for a company with Micron's current growth profile, although investors are clearly questioning its earnings sustainability. Image source: Getty Images. Micron is experiencing some DRAM drama Micron is one of the big three DRAM (dynamic random access memory) makers, together with its Korean counterparts SK Hynix and Samsung. The three form an oligopoly but have historically been very competitive; as a result, DRAM is widely viewed as a commodity. Its minuscule valuation stems from the boom-and-bust cycles that the DRAM market has experienced in the past. DRAM is currently in very short supply, and thus prices have shot up, which is the biggest reason behind Micron's strong results. However, investors clearly don't think these dynamics will last. Right now, investors are very interested in calling a top in the DRAM market, but that may be the wrong way to think about it. Instead, they should look at how high the floor has been raised. After all, this does not look like your ordinary DRAM cycle. ExpandNASDAQ: MUMicron TechnologyToday's Change(-0.49%) $-1.82Current Price$366.03Key Data PointsMarket Cap$413BDay's Range$340.50 - $366.9052wk Range$61.54 - $471.34Volume2MAvg Vol41MGross Margin58.54%Dividend Yield0.14% The DRAM market is being driven by the emergence of high bandwidth memory (HBM). To optimize performance, graphics processing units (GPUs) and other AI chips need to be packaged with this specialized form of DRAM. As such, the biggest driver of the current DRAM cycle is inexorably linked to the massive build-out of AI chip clusters in AI data centers. That's a structural growth driver, not just a typical commodity trend. At the same time, all three big DRAM makers are working to sign longer-term contracts for HBM of between three and five years with base volume commitments, which is a stark contrast to the typical yearly or often quarterly agreements of the past. This is all set to raise the floor on the DRAM market and make it less cyclical. That new floor and the secular growth trends in AI infrastructure are why Micron's stock looks like a buy after this dip. Read NextApr 4, 2026 •By Adam SpataccoIs Micron the New Nvidia?Apr 4, 2026 •By Keithen DruryDid Alphabet Just Say Checkmate to Micron?Apr 3, 2026 •By Keithen DruryThe High-Bandwidth Memory (HBM) Bottleneck Can Still Cause Micron's Stock to SoarApr 3, 2026 •By Jeremy BowmanWill Micron Be a Trillion-Dollar Company By 2030?Apr 3, 2026 •By Danny Vena, CPAWhy Micron Stock Slumped 18% in MarchApr 3, 2026 •By James BrumleyMicron Stock: Buy, Sell, or Hold?About the AuthorGeoffrey Seiler is a contributing Motley Fool stock market analyst covering technology, consumer goods, healthcare, energy, and materials stocks. Prior to The Motley Fool, Geoffrey was a senior equity analyst at Raging Capital Management, a $600 million long-short hedge fund. He holds a bachelor’s degree in history from Haverford College.TMFFindProfitStocks MentionedMicron TechnologyNASDAQ: MU$366.03(-0.49%)-$1.82*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.