It’s been a volatile stretch for the markets. Between trade tensions, economic jitters, and mixed signals from policymakers, investors have had no shortage of reasons to stay on edge. The S&P 500 has slipped into correction territory, down more than 10% from its highs thanks in part to uncertainty over tariffs and recession fears.
But for seasoned investors, pullbacks like these often create the best opportunities. When panic drives prices lower across the board, high-quality companies can get swept up in the selloff, offering value hunters a chance to grab strong businesses at discount prices.
Two names in particular stand out right now Target and Micron. Both are beaten down, both are trading at ultra-low valuations, and both could have serious upside over the next couple of years.
Key Points
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Market pullbacks driven by recession fears and trade tensions have created rare buying opportunities in quality stocks.
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Down over 60%, Target trades at just 10x earnings. A modest recovery in earnings or sentiment could lead to significant upside.
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Micron’s AI-driven growth and Nvidia partnership are fueling a rebound. At 10x forward earnings, the stock looks poised to double.
Cheap Chic, Deep Discount
Target has fallen a long way from its pandemic-era peak, shares are down over 60% and many investors have bailed out.
Management has faced a wave of headwinds including sluggish discretionary spending, fading 2020-21 era tailwinds, and internal challenges like elevated theft. The most recent results showed flat comparable sales and earnings per share, and management isn’t expecting much change this year. The leadership team is guiding for EPS of $8.80–$8.90 and essentially zero revenue growth.
That sounds bleak but Wall Street may have overreacted. Target now trades at just 10x times earnings. That’s an unusually low multiple for a retailer with a strong brand, nationwide footprint, and history of profitable growth. Even if earnings stay flat, there’s room for the stock to re-rate higher. If profits recover even modestly, the upside could be dramatic.
What’s more, Target isn’t standing still but is reinvesting in its store experience, expanding its popular private labels like Cat & Jack and All in Motion, and aiming to add $15 billion in sales over the next five years. It’s leaning into its “cheap chic” roots and rebuilding the brand magic that once made it a favorite of style-savvy bargain hunters.
If Target can restore even part of its pre-pandemic earnings power, and sentiment begins to turn, the stock has a very real shot of rising by as much as 100% over the next 24 months.
Riding the AI Wave
Micron isn’t exactly a household name, but it’s a key player behind the scenes of the tech world. The company makes memory chips, an essential component in everything from smartphones to data centers. That business is notoriously cyclical, and when demand slumped in 2022, Micron’s stock took a big hit.
But the picture has changed dramatically.
Micron is now riding a new wave of demand, this time powered by artificial intelligence. Its data center segment is booming with revenue more than doubling last quarter and it has forged a strong partnership with none other than Nvidia, the current king of the AI chip world.
There are still big picture risks, of course. The U.S.-China trade tensions could impact supply chains or demand abroad. But the AI trend is real, and it’s only gaining momentum. Big tech companies are racing to build out infrastructure for large language models and generative AI tools and Micron’s memory is a key ingredient.
Despite that tailwind, Micron is still trading at just 10 times forward earnings. If the company hits analysts estimates—or even comes close—the stock may very well be re-priced to a higher multiple. Combine that with top-line growth, and a double from here isn’t out of the question.
Yes, Markets Are Jittery But…
Markets are jittery. But as any long-term investor knows, some of the best returns come from leaning in when others are heading for the exits.
Target and Micron have both taken hits. But they’re backed by real businesses, with clear paths to recovery and they’re priced like they’re headed for the scrap heap. That disconnect creates opportunity.
If you’re patient and willing to ride out some short-term noise, both stocks offer the potential for serious gains in the next couple of years.