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Micron's (MU) market capitalization has reached an astronomical $1.2 trillion. The market is currently in a state of intense euphoria regarding MU stock, easily granting the company a trailing price-to-earnings (P/E) ratio of 56.9 times. Bulls might argue that the forward P/E is only 20 times, and investors believe that the current windfall profits are guaranteed for the company for decades to come. However, in my view, this fundamental misperception is creating a dangerously overheated stock, driven by a misunderstanding of the nature of the manufacturing deficit. Reality operates by different rules.
