It’s impressive—until it isn’t. Take Micron Technology (NASDAQ:MU) and Microsoft (NASDAQ:MSFT) as case studies. Micron’s stock has surged recently, but it’s currently about 15% lower than its peak earlier this month. Meanwhile, Microsoft has seen its value drop by over 20% since late October 2025.
Many investors looking ahead are considering whether stocks related to Artificial Intelligence (AI) are a sound investment during this downturn. Is it a better time to buy Micron or Microsoft with AI stocks on the slide?
Micron faces some noteworthy challenges, namely its classification as a cyclic stock. It’s a valid point, really, considering prediction of market cycles can be almost impossible. Still, the current demand and supply dynamics seem to favor Micron for the foreseeable future.
Micron stands out as one of the few suppliers for high-bandwidth memory (HBM), which is essential for various AI applications. In fact, the company reported that its entire HBM inventory for 2026 has already been sold.
The demand for HBM isn’t expected to wane; Micron forecasts that the overall market for HBM will increase significantly—by about 40% annually over the next three years, projected to grow from $35 billion in 2025 to $100 billion by 2028.
But that’s not the only positive aspect for Micron. There’s also high demand for DRAM and NAND memory. The company is engaging in multi-year supply contracts, which is somewhat rare in the industry.
Currently, Micron’s stock trades at a valuation of just 12 times its expected earnings. This lower valuation mainly stems from investor worries concerning its cyclical nature. However, if Micron manages to achieve strong sales and profit growth in the upcoming quarters, its stock might see a rebound.
Microsoft isn’t usually considered a value stock, but right now, its valuation is among the lowest it’s seen in a decade. So, what led to Microsoft’s stock plunge? A few factors exist. Primarily, the company reported slightly disappointing revenue growth for its Azure cloud division. Additionally, some analysts are apprehensive about Microsoft’s intentions to ramp up capital spending this year.
