Micron Technology (MU  ) is one of the largest memory chipmakers in the world. The stock had enjoyed massive gains as the pandemic and stimulus payments led to a boom in the purchase of PCs, laptops, tablets, and smartphones. Overall, Micron more than tripled between March 2020 and April 2021.

Since then, the stock is down by nearly 30% amid concerns of a decline in tech spending and increased production which is affecting the outlook for chip pricing. This was reflected in the stock's recent earnings report in which Micron topped analysts' estimates for earnings and revenue but issued weaker guidance than expected by a large margin, causing the stock to drop by 3%.

Inside the Numbers

In its fiscal Q4, Micron reported adjusted earnings per share of $2.42, beating consensus estimates of $2.33 per share. Revenue came in at $8.3 billion which beat estimates of $8.23 billion. Overall, this was a 124% increase in earnings and a 37% growth in sales.

The quarter also marked records for the company in terms of revenue and market share in several markets. It also initiated a quarterly dividend. Despite this, shares sold off on concerns about weakening prices for memory chips in Q4 and beyond due to high inventories and concerns of decreased demand next year due to a lack of stimulus payments and high levels of buying last year.

Micron expects $7.65 billion in revenue in Q1 which fell short of expectations of $8.6 billion. EPS also missed at $2.10 vs $2.33. Essentially, the company sees its growth trajectory as flattening while analysts were looking for further continuation.

Stock Price Outlook

Micron's lower guidance seems to confirm that investors were correct in anticipating some sort of slowdown in Micron's growth. Many tech stocks that experienced accelerating revenues during the pandemic are now underperforming due to tough comps and normalization in behavior.

Micron will also face these headwinds next year, as tech spending stayed strong in 2021 due to stimulus payments. It's likely to decelerate next year which could lead to continued underperformance in Micron especially given that pricing looks to be depressed next year.

However, even with a slowdown, Micron's stock looks attractively valued with a forward P/E of 7.3 which is significantly cheaper than the S&P 500's forward P/E of 22. Yet, it could be a "value trap" if Micron's earnings have peaked and then could move in the opposite direction.