--- title: "EXCLUSIVE: Micron’s Low P/E May Be Lying to Investors" type: "News" locale: "en" url: "https://longbridge.com/en/news/300062427.md" description: "MarketVector's Josh Kaplan warns that Micron Technology's low forward P/E ratio of roughly 7x may be misleading for investors. Due to the cyclical nature of the semiconductor industry, earnings often peak before a downturn, making the stock appear cheap at the cycle's height. Kaplan cautions that when the cycle turns, earnings will drop precipitously, potentially causing the P/E ratio to rise even as the stock price falls, creating a valuation trap." datetime: "2026-09-24T17:22:25.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/300062427.md) - [en](https://longbridge.com/en/news/300062427.md) - [zh-HK](https://longbridge.com/zh-HK/news/300062427.md) generator: "portal-rs" --- # EXCLUSIVE: Micron’s Low P/E May Be Lying to Investors **Micron Technology, Inc.** (NASDAQ:MU) looks cheap by one of Wall Street’s favorite valuation measures. But that apparent bargain may be exactly what makes the stock tricky. **MarketVector** Head of Research & Investment Strategy **Josh Kaplan** says semiconductor investors can misread low price-to-earnings ratios because earnings often peak before the cycle turns. ## When Cheap Gets Complicated Micron’s forward P/E ratio has fallen into the single digits as earnings expectations have surged. Benzinga Pro data puts the stock at roughly 7 times forward earnings. That can make Micron look inexpensive compared with many technology stocks. But Kaplan argues investors need to understand what those earnings actually represent. "P/E ratios are often contrarian indicators," Kaplan told Benzinga in an exclusive email interview, pointing to Micron as an example of how cyclical semiconductor stocks can fool investors. The issue is that memory is a cyclical business. When pricing and demand are strong, earnings can climb sharply, making the P/E ratio look unusually low. But if the cycle reverses, earnings can fall much faster than investors expect. That can produce a strange outcome: the stock can look cheapest near peak earnings and most expensive near trough earnings. **Read Also: Dan Ives Says Microsoft And Meta Are Being Treated Like 'Bear Market' Stocks** ## The P/E Trap Kaplan says investors may look at Micron trading around a 12–13 forward P/E in the framework he discussed and wonder, "how it can possibly be so cheap!" But if those earnings are close to a cyclical peak, the low multiple may be telling investors less about valuation and more about where the earnings cycle currently sits. "When the earnings cycle turns, and it will, earnings will drop precipitously," Kaplan said. He expects the stock price to fall as well, but notes that the P/E ratio could actually rise at trough earnings — potentially making the stock appear expensive just as the cycle is preparing to turn again. That is the unusual part of the semiconductor valuation puzzle: a rising P/E does not automatically mean a stock has become more expensive in economic terms, just as a falling P/E does not automatically mean it has become cheaper. ## What Investors Should Watch Kaplan’s warning comes as Micron heads into a period of enormous earnings expectations. Wall Street expects fiscal fourth-quarter adjusted earnings of $31.45 per share, versus $3.03 a year earlier, according to recent Benzinga reporting. For investors, the more important signal may therefore be what happens to earnings expectations after the peak rather than how low Micron’s P/E looks today. Kaplan’s broader point is that semiconductors remain cyclical even during an AI boom. A cheap multiple is only as useful as the earnings underneath it. **Read Also: AI Is Supercharging Memory Stocks. Are Earnings Lying?** *Photo: Samuel Boivin / Shutterstock – ejk* ### Related Stocks - [MU.US](https://longbridge.com/en/quote/MU.US.md) - [MUU.US](https://longbridge.com/en/quote/MUU.US.md) - [MULL.US](https://longbridge.com/en/quote/MULL.US.md) - [MUD.US](https://longbridge.com/en/quote/MUD.US.md) - [MUYY.US](https://longbridge.com/en/quote/MUYY.US.md) - [MUZ.US](https://longbridge.com/en/quote/MUZ.US.md) - [MSFT.US](https://longbridge.com/en/quote/MSFT.US.md) - [META.US](https://longbridge.com/en/quote/META.US.md) ## Related News & Research - [Why Micron stock dropped today](https://longbridge.com/en/news/300343531.md) - [Is Micron Stock Going to $1,625? 1 Wall Street Analyst Think So.](https://longbridge.com/en/news/300099620.md) - [5-Star Analyst Sees 80% Upside in Micron Stock](https://longbridge.com/en/news/300340728.md) - [Micron stock sinks on AI safety fears, higher yields. Watch this instead.](https://longbridge.com/en/news/300289741.md) - [What To Expect From Micron’s (MU) Q3 Earnings](https://longbridge.com/en/news/300373851.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**