Micron Technology Stock Rallied 35% – Have You Assessed the Risk

Micron Technology (MU) stock is up 35.5% in 21 trading days. The stock looks fairly priced at the moment. Consider the following data:

• Size: Micron Technology is a $249 Bil company with $37 Bil in revenue currently trading at $221.91.
• Fundamentals: Last 12 month revenue growth of 48.9% and operating margin of 26.2%.
• Liquidity: Has Debt to Equity ratio of 0.06 and Cash to Assets ratio of 0.12
• Valuation: Micron Technology stock is currently trading at P/E multiple of 29.2 and P/EBIT multiple of 24.6
• Has returned (median) 23.6% within a year following sharp dips since 2010. See MU Dip Buy Analysis.

While we like to ride the momentum if the fundamentals check out – for MU, see Buy or Sell MU Stock – we are wary of bull traps. Specifically, it is worth trying to answer if things get really bad, and MU drops 20-30% to $155 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience. Turns out, the stock has fared much worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

A single stock can be risky, but there is a huge value to a broader, diversified approach. If you seek an upside with less volatility than holding an individual stock, consider the Trefis High Quality Portfolio (HQ). HQ has outperformed its benchmark — a combination of S&P 500, Russell, and S&P midcap index — and achieved returns exceeding 91% since its inception. Risk management is key — consider what the long-term portfolio performance could be if you blended 10% commodities, 10% gold, and 2% crypto with HQ’s performance metrics.

Below are the details, but before that, as a quick background: MU provides memory and storage products, including DRAM semiconductor devices, through segments focused on compute, networking, mobile, storage, and embedded business units.

2022 Inflation Shock

• MU stock fell 49.8% from a high of $97.36 on 14 January 2022 to $48.88 on 26 September 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 7 March 2024
• Since then, the stock increased to a high of $221.91 on 28 October 2025 $221.91

 
2020 Covid Pandemic

• MU stock fell 42.5% from a high of $59.99 on 19 February 2020 to $34.47 on 16 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 16 November 2020

 
2018 Correction

• MU stock fell 53.7% from a high of $62.62 on 29 May 2018 to $29.02 on 24 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 23 November 2020

 
2008 Global Financial Crisis

• MU stock fell 88.1% from a high of $14.23 on 12 January 2007 to $1.69 on 20 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 27 June 2013

 
It is a good thing to keep in mind how low MU could go during a downturn. And you should also check how the stock fared when compared with the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 — the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.