After spending most of last year losing ground, shares of Micron Technology (NASDAQ:MU) have seen a recent surge. The Boise, Idaho-based memory chip maker suffered in 2018 as trade relations and the decline of a critical sector weighed on the semiconductor market. Even with the move higher of late, MU stock now trades at more than 40% below its 52-week peak.

However, on the other side of the continuum, MU shares have also clawed back 35% from their 52-week low. This gain indicates optimism that recovery could come soon. Micron stock has a history of cyclical behavior. Given that track record, profiting from MU stock will likely come down to patience rather than timing.

The Case for “Buy-and-Wait” on MU Stock

MU stock rose by almost 6.9% in trading Thursday and increased by about 5% on Friday. Absent any indications directly from the company, hopes that a trade deal with China could come soon has stoked optimism in semi companies. Chip stocks such as Nvidia (NASDAQ:NVDA) and AMD (NASDAQ:AMD) also moved higher on Thursday.

MU stock is the cheapest S&P 500 index stock as of the time of this writing. Seeing a price-to-earnings (PE) ratio fall to 3 is unusual in today’s market. That’s probably why investors, such as hedge-fund billionaire David Tepper, have made it one of their largest positions.

Also, considering this depressed memory market, Micron is taking the right approach by looking for consolidation. They recently bought out the remaining stake of 3D XPoint, their joint venture with Intel (NASDAQ:INTC). Once memory prices recover, control of the nonvolatile memory maker will leave Micron in a stronger position to address the opportunities in connected devices.

Still, one should never consider MU stock a “buy and hold.” My InvestorPlace colleague James Brumley pointed out the pros and cons of MU in his article. However, of all of the points he mentioned, I see the memory glut as the thing that always defines MU stock. As I have said many times, Micron stock acts as a proxy for memory prices. Poor iPhone sales, the decline in crypto, and the U.S.-China trade war all contribute. Improving Chinese trade could help end the glut. However, as long as demand remains low, MU will stay low as well.

But it will not stay at these levels forever. As history shows, slower times usually create an opportune time to invest long term. Trading at a PE of 3x, I do not see MU heading much lower.

This Time May Be Different

I usually cringe when I hear the words, “it’s different this time.” However, I concede that it will be different with memory demand. The number of devices needing memory has grown exponentially. The increasing importance of artificial intelligence (AI), virtual reality (VR), and the internet of things (IoT) point to the increased importance of memory chips. For example, with AI poised to drive vehicles soon, manufacturers will spare no expense to make sure these critical functions hold the needed memory.

Still, it is not different this time in the sense that investors still need to expect shrinking margins. These lowered earnings could weigh on MU stock for the foreseeable future as analysts expect falling profits through at least 2021. Current forecasts for fiscal 2021 put consensus earnings at $2.55 per share. That would take the 2021 forward PE to just over 14x. Investors should note that the five-year average PE on Micron comes in at 13.9x.

Still, what to do about MU stock depends on one’s investment philosophy? For investors willing to wait, I recommend MU despite the move higher. However, those that need to see gains as soon as possible should probably consider other equities.

Bottom Line on MU Stock

A recovery in Micron stock appears to comes down to timing. After falling for most of 2018, the equity has seen a revival in recent weeks. The demand for chips that AI, VR, and IoT will bring should eventually increase returns in MU stock. However, analysts forecast lower earnings through at least 2021.

Given these factors, buying Micron stock comes down to a question of when. As Mr. Brumley says, if one has the cash to wait, MU presents a buying opportunity at current levels.

Micron’s move back to all-time highs will not happen overnight. However, for those who can afford to wait for a recovery, MU stock will serve them well.

As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting.