$Micron Technology(MU)$ If Micron is considered overvalued at an 11x P/E due to its cyclical nature, the same logic should apply to $NVIDIA Corp(NVDA)$ and $Advanced Micro Devices(AMD)$ , which are also cyclical businesses. Both NVIDIA and AMD are heavily dependent on AI-driven demand, yet they trade at much higher P/E ratios, around 33x.
This discrepancy raises the question: why is Micron seen as overvalued, while NVIDIA and AMD aren't, despite facing similar market cycles? Micron's lower P/E suggests it is priced more conservatively, offering a cushion if AI demand falters. In contrast, NVIDIA and AMD’s high valuations assume sustained AI growth, which is far from guaranteed.
If AI demand slows or normalizes, both companies could see earnings decline, making their high P/E ratios unsustainable. Micron, at a much lower multiple, appears more reasonably valued given the risks, while NVIDIA and AMD are arguably priced for perfection in a highly cyclical market.
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