Micron is a leading maker of computer memory products that are vital to the efficient operation of AI data center servers.
Its revenue, net income, and free cash flow are growing at incredible rates due to a shortage in computer memory.
It trades at a low P/E ratio relative to other AI hardware stocks.
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Fears abound that the market is in an artificial intelligence (AI) bubble. But despite what the talking heads are saying, a full 90% of respondents surveyed for The Motley Fool’s 2026 AI Investor Outlook Report who identified themselves as AI investors said they either plan to hold or grow their positions in AI stocks this year.
That paints a rosy picture of retail investors’ views of the industry, but even so, it’s clear that a lot of AI stocks have become expensive relative to their earnings. However, for investors who are looking for new opportunities to buy now, there’s one company that sits at the nexus of the AI infrastructure buildout that’s trading at an absolute bargain level: Micron Technology (NASDAQ: MU).
Micron designs and produces memory hardware for all types of computer systems — including data center servers.
What’s important to recognize here is that AI systems operate by processing enormous amounts of data. And whether those servers are getting their processing power from clusters of GPUs from Nvidia or Advanced Micro Devices, or from application-specific integrated chips (ASICs) from Broadcom and its hyperscaler clients, they all still need rapid access to that data — which means it must be stored on chips like those Micron produces.
According to data from TrendForce, the current level of demand for random access memory (RAM) chips exceeds supply by 10%. And speaking to NPR, a senior TrendForce research exec 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. Moreover, she expects prices to rise by another 40% during the current quarter and stay elevated for the foreseeable future.
Micron produces the DRAM, RAM, and data center memory hardware that AI programs need. In particular, Micron has a portfolio of high bandwidth memory (HBM) products that feature high performance and power efficiency. The surging demand for memory to support AI servers, combined with Micron’s bevy of high-quality products, has created a perfect storm, accelerating the company’s growth.
In its fiscal 2026 first quarter, which ended Nov. 27, Micron’s revenue rose 56% year over year to $13.6 billion. Net income saw even more impressive growth, surging 178% from $1.87 billion in the prior-year period to $5.2 billion, while operating cash flow rose by 159.5% year over year to $8.41 billion. Over the past four reported quarters, it has achieved a net income margin of 28.2%. Finally, the company’s cash reserves stand at $9.7 billion — funds it can use to expand its operation.
