Generally speaking, investing in semiconductor stocks has proven to be a wise choice over the last year. As major players in artificial intelligence (AI) ramp up their infrastructure budgets, the demand for additional chips in data centers is becoming increasingly crucial.
However, recent market trends indicate that growth investors are broadening their focus beyond just well-known AI chip companies. In the past six months, Nvidia and Advanced Micro Devices have experienced gains of 7% and 16%, respectively.
Will AI produce the world’s first millionaire? A recent report from our team highlights a relatively obscure company, dubbed an “essential monopoly,” which supplies vital technology utilized by both Nvidia and Intel.
It appears that capital inflows are shifting toward the memory and storage sectors, with Micron Technology being a key benefactor. The company’s stock price has surged a staggering 255% since mid-August.
Let’s delve into the factors propelling Micron’s stock upward and evaluate whether its growth can be sustained through 2026.
Micron’s management asserts that the total addressable market for high-bandwidth memory (HBM) was valued at $35 billion in 2025. This market is projected to grow by 40% annually until 2028, with total investment opportunities expected to surpass $100 billion by the end of the decade.
However, the AI memory landscape is quite fragmented, and Micron faces stiff competition primarily from just two major players: Samsung and SK Hynix.
The limited competition, coupled with rapid market growth, has intensified the shortage of dynamic random access memory (DRAM) and NAND solutions. This situation has given Micron substantial pricing power as leading tech firms work to enhance their GPU clusters with appropriate HBM configurations.
According to Wall Street consensus, Micron’s revenue is anticipated to hit $76 billion in fiscal 2026, marking a 103% increase year-over-year. Analysts predict that strong unit economics will translate into earnings growth, with earnings per share expected to rise from $7.59 in fiscal 2025 to $33.92 for this year.
Despite notable price increases and favorable growth projections, Micron’s forward price-to-earnings (P/E) ratio is still relatively low at 12.3x. For context, the average forward P/E ratio for the Nasdaq 100 sits around 24.5, with other prominent companies like Nvidia, AMD, Taiwan Semiconductor Manufacturing, and Broadcom ranging from 25x to 37x.
If Micron’s stock were to be evaluated at 20 times its forward earnings, this would still place it below the Nasdaq 100 and nearby AI chip stocks, valuing it around $660—indicating a possible 57% upside from where it stands now.
Although individual semiconductor companies command different markets and growth trajectories, one takeaway is clear: Micron is currently valued at a notable discount compared to other leading AI chip manufacturers.
For these reasons, I’m optimistic that Micron’s valuation will continue to rise as investments in AI infrastructure gather momentum and expand into the broader HBM market.
Before considering an investment in Micron Technology, keep the following points in mind:
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