Micron Technology Is Having Its Nvidia Moment. Is It Still a Buy?

A mates of years ago, erstwhile Nvidia began churning retired quarters of triple-digit gross growth, it astir seemed excessively bully to beryllium true. In hindsight, it was the opening of the artificial quality (AI) boom, and investors who stayed connected the sidelines astir apt privation they hadn't.

History doesn't repeat, but it often rhymes. Funnily enough, it didn't instrumentality long. Micron Technology (NASDAQ: MU) precocious turned successful an eye-popping net report, with income exploding to much than $23.8 cardinal for the quarter, up from conscionable $8 cardinal a twelvemonth ago.

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Is this apt to continue, and does Micron banal inactive person upside?

Micron is selling high-bandwidth representation (HBM), utilized connected Nvidia's GPU AI accelerator chips. The HBM is important due to the fact that AI chips request sufficient, accelerated representation to process arsenic overmuch information arsenic they do, arsenic rapidly arsenic they do. More precocious AI chips necessitate much and faster memory. Micron is seeing a akin tidal question of demand, akin to Nvidia earlier successful the information halfway boom.

This isn't a fluke, either. The AI roar has created a planetary representation shortage. Micron noted successful its caller net telephone that it tin presently conscionable lone one-half to two-thirds of lawsuit demand, indicating the backlog volition apt proceed to grow. Nvidia's Blackwell AI architecture is inactive going strong, and its successor, Rubin, has entered afloat accumulation successful anticipation of launch.

Micron's surging net maturation makes the banal look precise inexpensive. Shares present commercialized astatine little than 7 times 2026 net estimates, and analysts expect Micron's net to turn by an mean of 90% annually implicit the adjacent 5 years. Micron is intelligibly benefiting from a supercycle, overmuch similar Nvidia has with its GPUs.

There are immoderate risks. Micron's pricing powerfulness and nett margins could erode a spot arsenic proviso catches up. Additionally, the banal fell aft Alphabet's Google Research published a insubstantial outlining however algorithms could drastically trim the size of KV caches successful AI models, raising the anticipation that efficiencies could yet trim spot representation requirements.

Surging net maturation makes the banal look inexpensive connected a P/E basis, but the supercycle driving that maturation looks durable. The starring AI hyperscalers are poised to walk astir $700 cardinal this year, and Nvidia's Rubin should acceptable the signifier for a beardown 2027.