In a move that may surprise nobody, artificial intelligence (AI) hyperscalers are planning to double down on their infrastructure spend this year. According to FactSet Research, big tech is forecast to spend over $500 billion expanding their data center footprints and procuring more chips in 2026.
What investors are probably overlooking is that rising capital expenditures (capex) is not just good news for Nvidia, Advanced Micro Devices, Broadcom, or Taiwan Semiconductor Manufacturing.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Read on to learn why Micron Technology (NASDAQ: MU) should be the AI chip stock on your radar this year and why I’m going to buy shares.
As the AI infrastructure era comes into focus, developers have their eyes on use cases in areas such as agentic AI, robotics, and autonomous systems. From a technical standpoint, these applications are far more sophisticated than building a chatbot.
In essence, AI workloads are going to grow exponentially in the coming years as investments in training and inference scale. From a budgeting standpoint, this means that big tech is no longer acutely focused on procuring as many general-purpose chips as possible.
Expanding AI workloads fuels demand for additional memory and storage. Micron is a major player in the world of high-bandwidth memory (HBM), dynamic random access memory (DRAM), and NAND chips.
Over the last year, shares of Micron have soared 277%. Indeed, with this level of momentum, some investors may be skittish about the stock continuing to rise.
Even with such meteoric gains, however, Micron still trades at a modest forward price-to-earnings (P/E) ratio. This pales in comparison to other leading semiconductor stocks along the AI chip value chain — which boast forward earnings multiples in the 30ish range at a minimum.
For this fiscal year, Wall Street is forecasting Micron’s earnings per share (EPS) to triple compared to last year. This seems reasonable given the secular tailwinds fueling investments in AI infrastructure and the specific importance of memory and storage to that narrative.
Should Micron’s forward P/E trade more in line with other chip leaders, shares could be headed toward $1,000 — nearly 150% higher than they are today.
No matter where Micron stock ends up by year-end 2026, I am confident shares will trend meaningfully higher over the long term.
