Micron stock was clawing back some of its recent losses on Monday -- but now probably isn't the time to buy the dip in the memory-chip maker, as investors continue to worry about artificial-intelligence spending.
Shares of Micron rose 2.7% to $908.49 ahead of the opening bell. They fell 2.1% last week, meaning they're were down 17% over the past month through Friday's close.
There wasn't an obvious catalyst driving the stock higher, other than a broader market rebound.
Other AI names including chips and networking company Marvell and memory-card maker Sandisk were also rising in Monday's premarket. Futures tracking the Nasdaq 100 advanced 0.9%.
It's tempting to see the recent selloff in Micron stock as a buying opportunity. It looks cheap, fetching just five times expected earnings for the current fiscal year -- not bad for a company with an 87% margin thanks to the AI data-center buildout driving up memory-chip demand.
But this probably isn't the right time to bet on shares. Monday's rebound was little more than dip-buying, with investors still questioning if Big Tech companies such as Alphabet and Amazon will still want to pay for the AI buildout at a time when their legacy businesses are struggling.
The market also faces three major tests this week -- Apple earnings, the midterm elections, and Friday's jobs report. If it can clear those hurdles and the AI spending worries go away, then Micron may be worth buying again.
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