Legendary investor Warren Buffett has often said the best investments are those with "wide moats" that stand the test of time.
The world is rapidly adopting advanced technologies, including data science, cloud computing, and artificial intelligence. Investors are seeking companies building competitive advantages in the new world paradigm. A few overlooked technology names can become multibaggers in the long run.
Let's take a look at two candidates today.
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Micron Technology
Micron Technology (MU 0.93%) has gradually transformed from being a cyclical memory supplier to a company supporting the buildout of global AI infrastructure. In August 2025, the company released improved guidance for the fourth quarter of its fiscal 2025, ended Aug. 28. Revenue is now expected to be in the range of $11.1 billion to $11.3 billion, above earlier guidance of $10.4 billion to $11.0 billion.
Non-GAAP (adjusted) gross margins are expected in the range of 44% to 45%, and non-GAAP earnings per share are expected to fall between $2.78 and $2.92. The company has upgraded the guidance mainly due to higher pricing for dynamic random access memory (DRAM) products and stronger execution.
The most critical driver for Micron's future growth is the explosive demand for high-bandwidth memory in complex AI applications and data centers. Micron has managed to ramp up HBM3E 12-high (high-bandwidth memory with 12 layers of DRAM chips stacked vertically) volumes faster than expected.
The company has already begun sampling HBM4 systems (the next-generation HBM with enhanced bandwidth, power efficiency, and capacity) to its clients and is collaborating with major customers to incorporate custom features on the even more advanced HBM4E systems. The company claimed that it has already sold off the 2026 HBM supply. Limited supply, coupled with deeper client engagement, could support stronger pricing power for Micron.
Micron also holds a strong position in low-power DRAM (LPDDR), used in data centers, which gives it an edge as hyperscalers strive for improved energy efficiency. The company has also introduced LPDDR5X (a newer, faster, and more power-efficient DRAM) chips designed to power AI applications in AI PCs and smartphones.
NASDAQ: MU
Key Data Points
However, there are some risks. According to TrendForce, HBM3E may face pricing pressures, as Samsung is expected to ramp up supply in 2026. Micron also continues to face a partial ban in China since 2023, after its products failed the network security review. However, since advanced packaging capacity needed to connect HBM chips to GPUs remains the main bottleneck for AI systems, HBM package supply may remain tight, which in turn will help pricing stay firm.
With shares trading at nearly 9 times forward earnings, Micron appears cheap compared to other AI players. Even if the AI tailwinds help boost Micron's valuation close to its historical five-year average of 22.2 times, the company's share price can grow multifold. Hence, the company can prove to be a multibagger in the long run.
Taiwan Semiconductor Manufacturing
Every major technology shift needs a backbone, and for today's AI transformation, that backbone is silicon. With a 70.2% share of the global foundry market, Taiwan Semiconductor Manufacturing (TSM 1.03%) plays a crucial role in building the global AI infrastructure.
In the second quarter, TSMC reported revenue of $30.1 billion, up 54% year over year. Diluted earnings per share (EPS) also climbed 60.7%. Advanced process nodes -- those at 7 nanometers and below -- accounted for almost 74% of wafer sales. High-performance computing platforms accounted for 60% of the company's total revenue. That shows how AI demand for advanced chips is now the company's biggest growth engine.
Management, however, has expressed concerns about margins due to a stronger Taiwan dollar and the ramp-up of overseas fabs in the U.S. (specifically in Arizona) and Japan. The company expects gross margin dilution due to high capex investments for the next five years. Capital spending is also likely to remain heavy, at $38 billion to $42 billion in 2025.
Despite the challenges, TSMC's investment thesis remains strong. The company has guided for around 30% year-over-year revenue growth in fiscal 2025 in U.S. dollar terms, driven by exceptional demand for its 3-nanometer and 5-nanometer nodes in high-performance computing and AI applications. While the supply of these advanced nodes is lower than the demand, packaging is an even bigger bottleneck.
Due to the capacity constraints of its Chip-on-Wafer-on-Substrate (CoWoS) packaging technology, which links GPUs with stacks of high-bandwidth memory, the company plans to focus solely on "narrowing the gap" instead of meeting all demand. This means that the company will continue to enjoy pricing power, which will help bolster margins.
NYSE: TSM
Key Data Points
TSMC is rapidly advancing its advanced manufacturing technology to stay ahead of the competition. The company expects volume production at its 2-nanometer node, which is more profitable than the 3-nanometer node, to start in the second half of 2025. The company's A16 node is designed to improve energy efficiency for AI data centers.
The company is also working to dramatically reduce its geopolitical concentration risk, as 90% of its most advanced manufacturing capacity is currently located in Taiwan, which is very close to mainland China. In the event of tensions between the two countries, it can lead to significant disruptions in the global AI and semiconductor supply chain. By building fabs in international markets, the company is making its business resilient to geopolitical shocks.
The stock's valuation is also reasonable. TSMC trades at 23.8 times forward earnings -- cheaper than many AI peers, such as Nvidia and Advanced Micro Devices, despite being equally prominent in the global chip supply chain.
While there are no guarantees, the leading foundry company with double-digit revenue growth, expanding global capacity, and a focus on continuous technological innovation to support the booming AI demand is definitely better placed than many others to emerge as a multibagger in the long run.
