Micron stock is a screaming buy at current valuation levels: Goldman Sachs

Micron's ( MU ) valuation has reached a level where it's simply too cheap to ignore given its fundamentals, says Goldman Sachs analyst James Schneider.

Schneider reiterated his $1,250 price target on the once red-hot AI momentum trade. It assumes about 70% upside from current levels.

"We also believe risk/reward is becoming more attractive for Neutral-rated Micron in light of the high probability of strong free cash flow in the coming quarters," Schneider said.

Micron is currently approaching tangible book value, Schneider noted. When a stock trades below tangible book value, investors value the company at less than the estimated value of its assets after subtracting its liabilities and intangible assets.

In a sense, the market is saying the company's physical and financial assets are worth more than the entire company's stock market value.

That seems to be bordering on an unwarranted disconnect , at least in assessing Schneider's work on the chip player.

Micron's stock is down 17% over the past month amid fears that a blue wave on Election Day could slow the build-out of AI infrastructure. That could have ramifications for orders for Micron's memory chips.

The rout has brought Micron's forward price-to-earnings (P/E) ratio down to an almost laughable 4.2 times, according to Yahoo Finance AlphaSpace data. Keep in mind Micron is coming off a quarter of strong demand amid memory chip shortages driving up prices.

The Street still expects Micron to grow earnings by at least 17% in its next fiscal year.

Follow Brian Sozzi on X @BrianSozzi , Instagram , and LinkedIn . Tips on stories? Email him at brian.sozzi@yahoofinance.com.