Hyperscalers are set to invest about $500 billion in artificial intelligence (AI) infrastructure this year.
So, it’s really no shock that these AI hyperscalers intend to double their infrastructure expenses this year. According to FactSet Research, major tech firms are projecting over $500 billion in spending by 2026 to enhance their data centers and acquire more chips.
What investors might not be fully grasping is that increasing capital expenditures (Capex) don’t only spell good news. It’s companies like Nvidia, Advanced Micro Devices, Broadcom, and Taiwan Semiconductor Manufacturing that are involved.
Keep reading because Micron Technology, in my view, should be the AI chip stock to watch this year. And, honestly, that’s why I’m considering buying it.
Why is everyone talking about Micron?
As we move deeper into the AI infrastructure era, developers are honing in on use cases like agent AI, robotics, and autonomous systems. These applications are, from a tech standpoint, far more intricate than simply creating a chatbot.
Fundamentally, AI workloads are set to skyrocket over the coming years, fueled by increased investments in training and inference. From a budgeting angle, this suggests that big tech isn’t just on a quest to stockpile commodity chips.
With the growing AI workloads, there’s an escalating demand for memory and storage. Micron stands out as the leading global player in high-bandwidth memory (HBM), dynamic random access memory (DRAM), and NAND chips.
Is it possible that Micron’s stock price will triple in 2026?
Last year, Micron’s stock price surged by an impressive 277%. Given such momentum, some investors may feel cautious about whether this rise can continue.
Yet, despite this speed of growth, Micron still has a fairly modest forward price/earnings ratio. This is quite low compared to other significant semiconductor stocks in the AI chip value chain, which often have forward earnings multiples exceeding 30x.
This quarter, analysts on Wall Street anticipate that Micron’s earnings per share (EPS) could triple compared to last year. This appears plausible considering the substantial long-term benefits driving investments in AI infrastructure, especially regarding the pivotal role of memory and storage in that context.
If Micron’s future P/E ratio aligns more closely with other leading chip companies, its stock might rise toward $1,000, which would be nearly a 150% increase from its current value.
Regardless of Micron’s stock performance by the end of 2026, my outlook is that it will trend upward significantly over the long haul.
