Roughly one month into 2026, it's already looking like artificial intelligence (AI) stocks are poised for even further gains. While cloud hyperscalers like Microsoft, Amazon, and Alphabet remain near-unanimous buys in the eyes of Wall Street, some smart analysts are picking another stock to be one of the biggest winners this year.
Joseph Moore of Morgan Stanley and Beth Kindig of the I/O Fund both listed Micron Technology (MU +5.34%) at the top of their AI chip stock rankings for 2026. Let's dig into why they could be right about Micron and analyze why now looks like a lucrative time to buy the stock hand over fist.
Image source: Micron Technology.
The newest bottleneck in the AI semiconductor stack
For much of the last three years, the biggest concern among AI developers was procuring chips. Graphics processing units (GPUs) designed by Nvidia and Advanced Micro Devices are the core piece of hardware on which generative AI models are trained.
As big tech plans for the future, AI is moving beyond chatbots and large language models (LLMs). Over the course of the next decade, a host of next-generation applications across autonomous systems, humanoid robotics, and agentic AI are expected to launch.
The acceleration of investment in training and inference is fueling an unprecedented rise in compute capacity. Given these dynamics, Research and Markets estimates that the total addressable market (TAM) for global AI will grow at a 31% compound annual growth rate (CAGR) through 2035 -- reaching a size of $5.3 trillion.
As AI workloads continue to expand, developers need to invest downstream in the semiconductor value chain. This means that building clusters of GPUs for data centers is not the only priority anymore. The newest bottleneck alongside capacity constraints is memory and storage. This is where Micron's growth arc begins.
NASDAQ: MU
Key Data Points
How fast is Micron growing?
Micron designs chips equipped to handle high-bandwidth memory (HBM), dynamic random access memory (DRAM), and NAND capabilities. For its fiscal 2026's first quarter (ended Nov. 27), Micron reported total revenue of $13.6 billion -- an increase of 57% year over year. Sales from its DRAM division accounted for the lion's share of revenue in the quarter, growing to $10.8 billion and rising 69% year over year.
Perhaps unsurprisingly, Micron witnessed the most growth in its cloud memory and mobile and client business units. This makes sense given the broader tailwinds AI is witnessing from the cloud services providers as well as upgrade cycles in the consumer electronics market.
According to management, the TAM for HBM solutions is expected to grow at an annual rate of 40% through 2028 -- reaching a size of $100 billion. A subtle takeaway from this statistic is that the HBM market is forecast to grow at a faster rate than the size of the overall AI market as explored above. These dynamics should position Micron for robust levels of demand for the foreseeable future.
What makes Micron a good stock to buy in 2026?
While Micron's value proposition is clear, the stock still trades at a forward price-to-earnings (P/E) multiple of about 12. In my eyes, Micron is not yet viewed by most investors as an AI business on the cusp of hypergrowth.
Given the secular tailwinds fueling the overall AI market and the impact that has on HBM applications, in combination with Micron's booming business and attractive valuation profile, I see now as a great time to load up on the stock before meaningful valuation expansion occurs.
