Shares of Micron Technology (MU 1.16%) sank 4% after the company released fiscal 2023 fourth-quarter results (for the three months ended Aug. 31) on Sept. 27, but a closer look at the chipmaker's results suggests that its latest drop is a buying opportunity.

Micron struggled on account of weak memory demand in recent quarters, which has led to a sharp decline in memory prices and sent the company's top and bottom lines plunging. The company's latest quarterly report followed a similar storyline, but its guidance makes it clear that a turnaround is almost here.

Let's look at the reasons why buying Micron stock right now is a no-brainer.

Revenue and earnings were down significantly, but things are about to get better

Micron's fiscal Q4 revenue was down 40% year over year to $4 billion. The company finished the year with $15.5 billion in annual revenue, which was a 49% drop over the previous fiscal year. The memory specialist's margins shrunk at an alarming pace in fiscal 2023 on account of the crash in memory prices.

Micron's non-GAAP (adjusted) operating margin fell to negative 31% in fiscal 2023 from a positive reading of 33.4% in the previous year. As a result, the chipmaker swung to an adjusted loss of $4.45 per share from a profit of $8.35 per share in fiscal 2022.

For the current quarter, Micron expects $4.4 billion in revenue, along with an adjusted loss of $1.07 per share. The top-line estimate is comfortably ahead of the Wall Street estimate of $4.2 billion. However, analysts were anticipating a smaller loss of $1.04 per share, which explains why the stock fell after its latest report.

Micron Technology fourth-quarter 2023 earnings.

But investors are missing the bigger picture here. Micron's revenue estimate points toward a 10% year-over-year jump, which means that the memory market has hit a bottom and a turnaround is in the cards. Note too that Micron expects a negative gross margin of 4% in the first quarter of fiscal 2024, which would be an improvement over the negative reading of 9% in the previous quarter.

All this suggests that memory prices are finally firming up following a period of steep declines, which can be attributed to an improvement in demand as well as production cuts undertaken by memory market participants.

Micron Technology could step on the gas

Micron management pointed out on the latest earnings conference call that "significant supply and capital expenditure (capex) reductions across the industry have helped to stabilize the market and are enabling the recovery now underway."

Management added that memory supply growth is going to lag demand growth in 2024 as well, indicating that prices are likely to head higher. According to Yole Intelligence, the prices of dynamic random access memory (DRAM) fell 57% between the third quarter of 2021 and the second quarter of 2023. The prices of NAND flash storage memory were down 55% over the same period.

Investors should also note that DRAM demand is expected to increase by 6% in 2023, as per market research firm TrendForce, followed by a stronger 2024 when demand could jump 13%. The stronger growth in memory demand combined with supply controls should ideally lead to a jump in the memory market's revenue next year.

Not surprisingly, market research firm Gartner is forecasting a whopping 70% increase in memory revenue in 2024. All this explains why analysts estimate a nice jump in Micron's revenue from the current fiscal year.

MU Revenue Estimates for Current Fiscal Year Chart

MU Revenue Estimates for Current Fiscal Year data by YCharts.

What's more, the global DRAM market is expected to clock solid double-digit growth of 13.5% from 2023 to 2028, generating $232 billion in annual revenue at the end of the forecast period.

So, Micron Technology may be able to sustain solid growth in the long run as memory demand recovers along with pricing, which is why investors should consider capitalizing on any dips in this tech stock to buy more shares.