Acer's CEO Has a Warning for Micron Technology Investors
Acer's CEO Has a Warning for Micron Technology Investors
David Jagielski, CPA, The Motley FoolMon, September 28, 2026 at 7:05 PM UTC
0
Image source: Getty Images.Key Points -
Acer CEO Jason Chen is skeptical about the memory shortage lasting until the end of the decade.
Chinese production has been increasing, and Chen claims companies are trying to protect their margins with higher prices.
Micron's stock appears cheap, but only if expectations of future growth remain high.
10 stocks we like better than Micron Technology ›
Shares of Micron Technology (NASDAQ:MU) have surged 570% over the past year, as insatiable demand for memory and storage products has translated into terrific revenue and profit growth for the tech company. It's been able to raise prices due to a shortage of the products it sells.
Micron's stock appears cheap to investors, but that also depends heavily on the outlook for the ongoing shortage. And according to Acer's CEO, Micron may not be able to count on price hikes for too much longer.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
Why the shortage may not last until 2030
Acer CEO Jason Chen recently called into question the expectation that the ongoing shortage in memory products will continue until the end of the decade, and questioned whether price increases will be justifiable. Chen says that while some prices have been going up, others have been coming down. And that with China's production capacity increasing, fears of a shortage lasting until 2030 are overblown, and that companies are simply trying to protect their margins.
For Micron investors, it's a concerning warning because, if it's true, it could undermine the very reason for investing in the company. If the shortage doesn't end up lasting as long as feared and Micron isn't able to continually raise prices -- or worse, prices come down -- then the tech stock could quickly fall into a tailspin. Micron's business has historically been cyclical, and volatility has followed it. Many investors who are bullish on the stock believe that this time is different and that demand for all things related to artificial intelligence is so tremendous that the shortage won't end anytime soon.
Micron is a risky stock, despite its seemingly low earnings multiple
Given its massive earnings growth, Micron's stock doesn't appear expensive, as analysts believe there's much more growth ahead. The tech stock is trading at a forward price-to-earnings (P/E) multiple of just seven. That's based on projections of its future profits, based on analyst expectations.
However, if analysts come to the realization that the memory shortage won't last as long as expected, then that can result in lower earnings growth expectations, and a suddenly dirt cheap forward P/E multiple may begin to look a whole lot more expensive.
Advertisement
The danger with relying on expectations, whether they're from analysts or industry experts, is that they can and will change. With Micron's stock, expectations play a large role in its share price. Those who believe the insatiable growth will go on for years think the stock is a bargain, while those who are a bit more skeptical about its ability to continually raise prices, avoid the stock despite its cheap-looking valuation -- and that's the camp I fall into.
Should you buy stock in Micron Technology right now?
Before you buy stock in Micron Technology, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Micron Technology wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $383,680!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,382,954!*
Now, it’s worth noting Stock Advisor’s total average return is 937% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of September 28, 2026.
David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.
Source: “AOL Money”
