Shares of Micron Technology (NASDAQ:MU) have been on a run this year, rising more than 100% thanks to a surge in memory prices and strong demand from fast-growing areas such as cloud computing and solid-state drives. In fact, Micron stock recently shot up to 16-year highs after industry peer Samsung's (NASDAQOTH: SSNLF) latest results indicated that DRAM (dynamic random access memory) and NAND memory supply will remain tight next year, pointing toward a robust pricing environment.

This sets the stage for Micron to sustain its hot streak going forward. However, this is just one of the many reasons to remain bullish about Micron. The company's strategy of supplying its chips into fast-growing end markets should boost its sales volumes in the long run, thereby reducing its reliance on  cyclical memory industry pricing. Micron remains a top stock. Let's look at why.

An integrated circuit.

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Strong memory pricing will continue being a catalyst

Earlier, there were concerns that Samsung could flood the memory market next year with DRAM and NAND chips, creating an oversupply thanks to a mammoth $26.2 billion investment in its semiconductor division. This would have severely dented memory industry pricing, as the South Korean giant was planning to spend almost three-fourths of this capital expenditure on memory chip infrastructure.

However, Samsung might scale back its investment in memory chips as it is going to double its dividend next year. More specifically, the South Korean giant plans to pay 9.6 trillion won in dividends starting in 2018, which amounts to roughly $8.6 billion at the current exchange rate. The company plans to maintain this dividend level until 2020, so it won't be surprising if it reduces its capital outlay to meet the additional $4.3 billion dividends it will start paying from next year.

As a result, both DRAM and NAND memory supply is expected to remain tight in 2018. In fact, a NAND shortage is expected to last even into 2019 as there isn't enough supply available to meet current demand, so any new supply coming online will go toward satisfying the existing shortage.

On the other hand, DRAMeXchange forecasts that DRAM bit demand will increase 20.6% in 2018 after rising 19.6% this year as new supplies won't come into the market before 2019. Therefore, higher memory prices should keep driving Micron's revenue and profits next year.

Micron is looking to boost sales volumes

The good thing about Micron is that it isn't just relying on higher memory pricing to drive financial growth. The memory specialist is making inroads into areas where demand for its products will remain strong in the long run.

For instance, Micron recently announced a portfolio of storage solutions for video surveillance systems, targeting both the commercial and enterprise markets. These industrial-grade storage products, based on Micron's 3D NAND technology, allow video cameras to store footage on the device itself.

As a result, the operator will be able to reduce the load on the network as the video would have otherwise been stored in a centralized facility that needed a fast internet connection, while also reducing the risk of data loss in the event of a network failure. Therefore, Micron's video camera surveillance storage products can be deployed in remote areas with poor connectivity, making them ideal for deployment in industrial settings that require years of continuous recording in harsh environments.

Transparency Market Research forecasts that demand for surveillance systems will rise at almost 21% a year through 2025. This, however, isn't the only space that Micron is trying to attack.

The company recently launched high-performance memory solutions for autonomous cars that read/write data at high speeds, and it has already found multiple takers for the same. In fact, Micron claims that it is working with automotive companies to develop advanced memory solutions to enable fully autonomous driving. This is a smart move by Micron as an autonomous car is expected to generate 1 GB of data each second, and the company can fulfill the need to store and rapidly transfer this data with its advanced memory solutions.

These end markets should help Micron ship greater volumes of its memory products, thereby reducing the company's reliance on pricing to drive top-line growth.

The bottom line

Finally, Micron's valuation clearly indicates that it is a value play. The stock has a trailing price-to-earnings (P/E) ratio of just 10, so it is trading at a discount as its five-year average P/E is substantially higher at 14.2. At such a cheap valuation, an investment in Micron looks like a no-brainer considering that its sales could grow from $20.3 billion in the recently concluded fiscal 2017 to $24.7 billion in 2019, according to analyst estimates. The average analyst estimate for earnings per share in 2019 is $6.83, up from $4.96 in the just-completed fiscal year.

Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.