Over the last three years, the stock market has entered a rewarding bull run thanks in large part to the boom in artificial intelligence (AI). For most of the AI revolution, megacap technology stocks have been the primary beneficiaries.
In particular, semiconductor stocks such as Nvidia (NASDAQ: NVDA), Broadcom (NASDAQ: AVGO), and Taiwan Semiconductor Manufacturing (NYSE: TSM) have joined the exclusive trillion-dollar club due to their respective roles in fueling demand for generative AI.
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Over the last year, however, a new AI chip stock has entered the spotlight: Micron Technology (NASDAQ: MU), whose 304% return over the last 12 months absolutely trounces the returns of its peers as well as that of the broader S&P 500 and Nasdaq-100 indexes.
Let’s break down what is fueling the Micron stock rally and assess if now is a good time for investors to get in on the action.
Micron is a leader in specialized semiconductors, designing advanced memory and storage solutions.
The company produces dynamic random access memory (DRAM) for high-speed data processing in consumer electronic devices such as smartphones and laptops, as well as business solutions like AI servers.
In addition, Micron develops NAND flash memory, which complements the DRAM business, as durable, power-efficient memory is critical for AI data centers and emerging Internet of Things (IoT) applications.
Micron’s high-bandwidth memory (HBM) solutions are a critical enabler of graphics processing units and AI accelerators made by Nvidia and Advanced Micro Devices. The company’s business trajectory is currently fueled by AI-driven demand from the hyperscalers.
In 2026, Amazon, Alphabet, Microsoft, and Meta Platforms are forecasting they will spend upward of $600 billion on capital expenditures — the majority of which will be allocated toward further data center build-outs and chip procurement.
Considering Micron has already sold out of its HBM solutions for the year, it’s safe to say the company is emerging as a central figure in the AI infrastructure era as big tech doubles down on enhanced training and inferencing needs for its next-generation models.
While shares of Micron have gone parabolic, percentage gains in stock price don’t reveal much about a company’s true valuation profile.
