At first glance, the case for Micron being an overvalued stock could look quite weak. The company is trading at just 5.4 times this year’s expected earnings. Meanwhile, it has a one-year forward price-to-earnings ratio of roughly 4.6. The forward P\/E ratio of the S&P 500 index sits somewhere around 19. Given that Micron is growing earnings at a far faster rate than the average for companies in the benchmark index, it’s not unreasonable to suspect that the company is currently undervalued. <\/p>\n In the fourth quarter of Micron’s fiscal 2026, which ended on Sept. 3, the company posted non-GAAP<\/a> (adjusted) earnings per share (EPS) of $33.42, significantly exceeding the average analyst estimate of $31.61. Adjusted earnings per share rose 1,003% year over year, and sales rose 379% to $54.2 billion. Additionally, the company issued guidance that suggests that sales and earnings will continue growing at aggressive clips. <\/p>\n So why is Burry betting against Micron stock? <\/p>\n The semiconductor industry has always had a high level of cyclicality, and the memory chip arena where Micron operates has historically been even more prone to wide cyclical shifts. The company and its peers are currently enjoying a massive surge in demand for the high bandwidth memory (HBM) chips used in artificial intelligence (AI) processors. The resulting deep shortage in memory has pushed prices and margins sharply higher. But Burry is betting that this supply-and-demand imbalance will follow its historically cyclical pattern and reverse, putting an end to Micron’s explosive growth story. <\/p>\n Story Continues <\/p>\n Additionally, Burry has raised valuation risks connected to circular financing deals being used across the AI industry, as well as the rise of Chinese memory-chip makers that could dampen Micron’s pricing power. With AI leaders devoting massive capital expenditures<\/a> to build out their infrastructure foundations, and companies on both the hardware and software sides of the industry making business deals, partnerships, and equity investments with each other, he may be right to question the circular nature of this spending and the sustainability of massive capital expenditures. Similarly, the risk that a flood of cheaper memory chips from China could impair Micron’s growth trajectory is real. <\/p>\n Burry’s bet against Micron doesn’t necessarily mean that investors should sell their holdings or refrain from buying the stock, but it would be a mistake not to consider the risk factors he is highlighting. <\/p>\n Should you buy stock in Micron Technology right now? <\/p>\n Before you buy stock in Micron Technology, consider this: <\/p>\n The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks<\/a> for investors to buy now\u2026 and Micron Technology wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. <\/p>\n Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $380,579!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,359,789!* <\/p>\n Now, it’s worth noting Stock Advisor’s total average return is 934% \u2014 a market-crushing outperformance compared to 213% 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. <\/p>\n See the 10 stocks \u00bb<\/a> <\/p>\n *Stock Advisor returns as of October 15, 2026. <\/p>\n Keith Noonan<\/a> has positions in Micron Technology. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy<\/a>. <\/p>\n<\/a> Michael Burry. Image source: Getty Images. Why is Burry bearish on Micron? <\/p>\n