Last year, shares of artificial intelligence (AI) chip stock Micron Technology(NASDAQ: MU) blasted higher by 239% — making it one of the top-performing stocks in the Nasdaq-100 index.
While this level of momentum might suggest you’ve missed your opportunity to cash in on the AI darling, what if I told you the stock remains dirt cheap even after its parabolic rise? Let’s dig into the tailwinds fueling Micron stock right now and explore why the company’s growth is just getting started.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
Image source: Micron Technology.
When it comes to headlines about AI chips, odds are investors see references to Nvidia and Advanced Micro Devices more than any other company.
Nvidia’s roots are in designing graphics processing units (GPUs) — the hardware hyperscalers use to build generative AI applications. The company’s deep roster of Hopper, Blackwell, and now Vera Rubin architectures have helped Nvidia achieve a 92% market share in the AI GPU space.
In a distant second is AMD, whose MI400 accelerators have started to attract enterprise workloads as big tech seeks to complement their Nvidia infrastructure with a lower-cost chip stack.
As hyperscalers like Microsoft, Amazon, Alphabet, and Meta Platforms accelerate their AI capital expenditures, GPU designers such as Nvidia and AMD become the obvious winners. But underneath the surface, Micron is perhaps even more strategically positioned for the AI infrastructure revolution.
My rationale is that as more data centers are built and outfitted with GPU clusters, AI workloads will scale as developers introduce new products and services. In turn, these dynamics create a bottleneck in memory and storage solutions — precisely the market in which Micron operates.
Given the secular tailwinds fueling demand for HBM solutions, industry research suggests that the prices for dynamic random access memory (DRAM) and NAND chips could rise as much as 60% and 38%, respectively, during the first quarter.
These dynamics give Micron enormous levels of pricing power as hyperscalers increase their AI infrastructure budgets to be more inclusive of HBM systems. Against this backdrop, it’s no surprise the company has already reportedly sold out of its 2026 HBM inventory — hence, Wall Street’s bullish forecast.
For Micron’s fiscal year 2025 (which ends Aug. 28), the company reported $7.59 in earnings per share (EPS). According to Wall Street’s consensus estimates, Micron’s earnings are expected to be $33.73 per share in fiscal 2026 — representing over 340% growth year over year.
Despite Micron’s potential, the stock still trades at a discount relative to other AI chip leaders based on forward price-to-earnings (P/E) trends. In my eyes, the disparity between Micron and its cohorts is due to the cyclical nature of the memory chip market.
Smart investors understand that there aren’t many companies in Micron’s position — being on the cusp of riding a multi-year growth arc underscored by rising AI infrastructure buildouts. I think Micron’s valuation profile will normalize relative to its growth potential throughout 2026.
Should Micron trade more in line with other category leaders in the AI semiconductor market, the stock could reasonably soar anywhere between $650 to $800 — suggesting up to 100% upside from current levels.
For these reasons, I think Micron stock remains incredibly undervalued and is a no-brainer buy at its current price point.
Before you buy stock in Micron Technology, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Micron Technology wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $414,554!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,120,663!*
Now, it’s worth noting Stock Advisor’s total average return is 884% — a market-crushing outperformance compared to 193% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
Adam Spatacco has positions in Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Meta Platforms, Micron Technology, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
Thorlabs Sweden has adopted Stora Enso’s Papira biodegradable, wood-based cellulose foam for packing its optical and electronic equipment. Emballageteknik...
Ireland's foreign trade surplus increased in December as imports fell faster than exports, figures from the Central Statistics Office showed on Tuesday.The seasonally...
The Reserve Bank of New Zealand (RBNZ) is widely expected to leave the Official Cash Rate (OCR) unchanged at 2.25% tomorrow. Alongside the decision,...
