A lot is happening on the macroeconomic front at the moment. Between the interest rate discussion and the U.S. trade war with China, companies like Micron Technology (NASDAQ:MU) are likely pulling their hair out, trying to figure out the direction of the global economy. And that’s not a good thing for the owners of MU stock.

As another InvestorPlace contributor, Tezcan Gecgil, recently noted, Micron stock is incredibly volatile.  

In 2019, it’s traded above $44 for an extended period on two occasions and below $33 at two different times. If you bought MU stock at its two highest points in 2019, you’d be sitting on a loss of approximately 9%. 

As they say, timing is everything. 

So, now that MU stock has retreated from its late-July highs, investors are likely asking themselves whether it’s wise  to buy Micron stock on its latest dip. 

Here are what I see as the pros and cons of buying MU stock around $42. 

The Pros of Buying MU Stock

Goldman Sachs analyst Mark Delaney upgraded Micron stock on July 22 from a “neutral” to a “buy” while boosting his 12-month price target on MU by 40% to $56, suggesting that the stock could rise 33% over the next 12 months. 

As InvestorPlace contributor David Moadel pointed out, Delaney expects NAND prices to improve as excess inventory is depleted faster than expected, due to Toshiba Memory Corporation’s (OTCMKTS:TOSBF) fab outage .  

Delaney thinks market conditions will improve, which means the cut in earnings guidance by MU might be a tad conservative. As a result, MU’s Q4  results may  beat analysts’ average  outlook, he contended.

As Moadel also stated, despite the decline of MU’s earnings in Q3, it still managed to deliver earnings per share of  $1.05 on revenue of $4.79 billion. Both were significantly higher than analysts’ average estimates. 

Another positive about buying MU stock at its current prices is the fact that MU continues to use its free cash flow to repurchase its shares. In the first nine months of fiscal 2019, Micron’s repurchased 67 million of MU stock at an average price of $39.70 a share. 

As long as Micron is buying its stock, investors ought to be doing the same.  

The Cons of Buying MU Stock at Its Current Prices

The biggest reason investors are afraid of purchasing Micron stock at the moment is the fact that the company gets 57% of its revenue from China. As the trade war drags on, the Chinese are going to start making their own DRAM chips to bypass U.S. companies and the American tariffs. 

InvestorPlace columnist Jamie Johnson recently pointed out that China’s Changxin Memory Technologies is investing $8 billion in its DRAM operations,. Johnson  think there’s a real possibility that other Chinese companies will take similar steps. At some point down the road, China’s reduced reliance on American chip makers is going to be bad news for Micron stock. 

China is not going to become less reliant on products from American chip makers over night. However, China’s efforts should make investors question the wisdom of holding MU stock for three to five years. 

Another reason to avoid MU stock at its current prices is its deteriorating financials. 

Although Micron’s Q3 EPS handily beat analysts’ average expectations, it was still 66% lower, excluding some items,, than in the same quarter a year earlier.

Furthermore, analysts’ estimates for MU’s earnings are falling dramatically. At the end of May, analysts’ average  estimate for Micron’s FY20 EPS was $4.51 per share. Now the average EPS estimate is down to $2.49, representing a 45% cut in less than two months. 

So, is it wise to be running into a building as it’s going up in flames? I don’t think so.  

The Bottom Line on MU Stock

There’s no question that Micron stock has faced some short-term volatility in recent days as a result of the trade dispute. That’s probably not going away anytime soon.

MU isn’t slated to announce its Q4 earnings until Sept. 19, so there’s probably plenty of time to consider whether  to buy MU stock before the company sheds much more light on its business.

I’d try to buy MU stock in the mid-to-high $30s. Buying Micron stock at those prices is meaningfully safer than purchasing it at its current levels. Given the volatility of MU stock, I wouldn’t be surprised if investors were given a third chance to buy MU in the $30s before the year is out. 

I guess we’ll see.

At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.