1. Micron Technology (NASDAQ:MU)
Stock Performance Since Trade Date: +132.72%
MU has run too hot but bulls argue that it still has substantial upside because the company is playing a critical role in the artificial intelligence revolution.
The reason is straightforward. Micron manufactures DRAM chips, NAND flash memory, and high-bandwidth memory products. Cloud providers, data centers, and consumer electronics manufacturers all require this memory to function. Memory is no longer treated as a commodity product. It has become a strategic bottleneck that determines whether AI infrastructure can be deployed efficiently. Hyperscalers cannot afford to have their expensive AI chips waiting for memory availability.
The financial results validate this shift. In fiscal Q2 2026, revenue tripled year over year. DRAM revenue specifically grew 207% year over year. NAND revenue grew 169% year over year. This is exceptional growth for a company that was previously viewed as cyclical and commodity-like.
Micron Technology (NASDAQ:MU) is fundamentally shifting its business mix toward data centers. Data center DRAM and NAND demand is expected to exceed 50% of the total industry available market for the first time in 2026. Historically, memory demand came from PCs and smartphones. Today, the biggest buyer is the hyperscaler building massive AI infrastructure.
High-bandwidth memory, or HBM, is another major catalyst driving Micron Technology’s (NASDAQ:MU) growth. HBM is a specialized type of memory designed specifically for AI processors. It stacks memory vertically to deliver extremely high bandwidth, meaning data moves between the chip and memory at blazingly fast speeds. NVIDIA’s latest Blackwell GPU uses HBM memory extensively. Micron Technology (NASDAQ:MU) has already begun volume shipments of HBM4 products. The company is sampling 16-high HBM4 configurations and developing next-generation HBM4E products with greater customization for specific customer needs.
Heartland Mid Cap Value Fund stated the following regarding Micron Technology, Inc. (NASDAQ:MU) in its Q1 2026 investor letter:
“Beneath the surface, excitement surrounding artificial intelligence (AI) continues to foster an environment of extreme valuation disparity between perceived winners and losers of an AI infrastructure buildout and the associated implications of use cases proliferating across the global economy. Euphoria is typically born in truth (a positive business driver) and then over-extrapolated in valuation. Micron Technology, Inc. (NASDAQ:MU) is currently a major AI beneficiary due to surging demand for memory and storage. An observation of Micron Technology’s enterprise value to sales multiple provides one indication of where we are today. In just a few years, MU has seen its EV/sales multiple expand six-fold. MU is a “Deep Value” company, one which was a strong contributor to our portfolio in the 2023-24 timeframe. Despite very real revenue/margin drivers from AI demand, we expect the passage of time to prove that MU remains an extremely cyclical and capital-intensive company that still sells a commodity and can have violent swings in profitability.”
While we acknowledge the potential of MU to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MU and that has 100x upside potential, check out our report about the cheapest AI stock.
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