Morningstar Sees 30% AI Stock Downturn, Questions Micron Exposure
MORN•Morningstar projects a 30% correction in AI-focused stocks over the next year, driven by forward P/E multiples above 40x and slowing growth trends. The firm identifies Micron—with 25% of revenue tied to AI data centers trading near 12x forward earnings—as a potential sell candidate.
1. Forecast of AI Stock Correction
Morningstar’s equity research team warns that AI-focused equities could retrace roughly 30% over the next 12 months, citing average forward P/E multiples exceeding 40x and decelerating revenue growth across major machine-learning chip suppliers.
2. Micron’s Specific Risks
Analysts single out Micron due to its 25% revenue dependence on AI data center spending and current forward P/E near 12x, making it vulnerable if demand from cloud providers softens.
3. Investor Guidance
The firm advises investors to stress-test AI-heavy allocations, consider trimming positions trading above intrinsic value estimates, and rebalance toward sectors with more predictable cash flows.
