-
Micron is a leading manufacturer of computer memory products essential to the efficient operation of AI data center servers.
-
Its revenue, net income, and free cash flow are growing at an incredible rate due to a lack of computer memory.
-
It trades at a low P/E ratio compared to other AI hardware stocks.
-
10 stocks we like better than Micron Technology ›
There are widespread fears that the market is in an artificial intelligence (AI) bubble. But despite what the talking heads are saying, 90% of respondents to The Motley Fool’s 2026 AI Investor Outlook Report who identified themselves as AI investors said they plan to maintain or increase their positions in AI stocks this year.
This paints a rosy picture of retail investor sentiment on the sector, but despite this, it’s clear that many AI stocks have become expensive relative to their earnings. However, for investors looking for new buying opportunities now, there is one company that is at the heart of building AI infrastructure and is trading at an absolutely bargain level: Micron technology (name: mu).
Micron designs and produces memory hardware for all types of computer systems, including data center servers.
What is important to recognize here is that AI systems operate by processing enormous amounts of data. And if these servers draw their processing power from GPU clusters of Nvidia Or Advanced micro-devices, or from application-specific integrated chips (ASICs) of Broadcom and its hyperscaler customers, they all still need rapid access to that data, which means it needs to be stored on chips like those produced by Micron.
According to TrendForce data, the current level of demand for random access memory (RAM) chips exceeds supply by 10%. And speaking to NPR, a TrendForce research manager said last month that prices for dynamic random access memory (DRAM) — the most common type of RAM — are 50% higher than they were a quarter ago. Additionally, it expects prices to rise another 40% in the current quarter and remain elevated for the foreseeable future.
Micron produces the DRAM, RAM, and data center hardware that AI programs need. In particular, Micron offers a line of high-bandwidth memory (HBM) products that deliver high performance and power efficiency. The growing demand for memory to support AI servers, combined with Micron’s multitude of high-quality products, has created a perfect storm, accelerating the company’s growth.
During the first quarter of fiscal 2026, which ended November 27, Micron’s revenue increased 56% year over year to $13.6 billion. Net income saw even more impressive growth, jumping 178% from $1.87 billion in the year-ago period to $5.2 billion, while operating cash flow increased 159.5% year-over-year to $8.41 billion. Over the last four reported quarters, the net profit margin was 28.2%. Finally, the company’s cash reserves stand at $9.7 billion, funds it can use to expand its operations.
