Is the Micron Sell-Off a Buying Opportunity or a Falling Knife?

MU has dropped 28% over the past month, even after a 773% surge since early 2025 that was driven by AI infrastructure demand. The pullback now has the stock testing whether the rally's momentum can survive a shift in sentiment.

The fundamentals behind the run are not in dispute. Fiscal 2026 revenue grew 256%, and net income jumped 895%. Those are the numbers that fueled the climb, and they remain intact while the share price retreats.

Two concerns are pressuring the stock: fears of an AI bubble and the view that the cyclical memory market may be peaking. Interpretation: the sell-off looks like a market repricing the durability of peak-cycle earnings rather than reacting to any deterioration in the reported results. Growth rates of this size are hard to repeat, and the stock may be discounting that.

The Motley Fool author frames the decline as a buying opportunity for long-term investors who can stomach high volatility. The recommendation is dollar-cost averaging rather than a lump-sum purchase, an approach that acknowledges the stock could fall further before stabilizing.

The core debate is whether a 28% monthly drop after a 773% run is a reset or the start of a cyclical downturn. Both readings are consistent with the evidence, which is why the "falling knife" question remains open.