Tech companies involved in memory and storage solutions have been hot buys in the past year, as demand for that hardware has surged amid the rapid buildout of data centers to support artificial intelligence (AI). One that has been particularly hot is Micro Technology (MU 3.15%) -- its shares are up by around 280% in a span of just 12 months.
After such a significant run-up over a relatively short period, you might wonder if the tech stock has peaked. But according to the company's CEO, there could still be plenty of runway left for the business and the stock.
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Supply to remain tight until at least 2027
Micron Technology sells memory and digital storage products. Late last year, it announced that it would be exiting its consumer memory products business and refocusing entirely on the enterprise market, where it is seeing incredibly strong demand due to AI.
In a recent interview, CEO Sanjay Mehrotra said that the company's sales growth has been much stronger than expected, with demand outpacing supply, and that "we see that tightness continuing into 2027, so we see durable industry fundamentals over the foreseeable future, driven by AI demand."
That makes it a bit more evident as to why the company felt the need to pivot away from its Crucial brand consumer business. Given the overwhelming demand from enterprise customers, focusing on them could also help strengthen its margins in the process.
NASDAQ: MU
Key Data Points
Why Micron's stock may still go higher
Although Micron's stock has skyrocketed over the past year, I'm optimistic that with demand remaining strong and the company focusing on data center customers, its valuation may still rise higher.
In its most recent quarter, which ended on Nov. 27, 2025, Micron's revenue totaled $13.6 billion -- a year-over-year increase of 57%. What's even more encouraging is that its operating profit nearly tripled from $2.2 billion to $6.1 billion. When a company's bottom line is growing at a faster pace than its top line, that's excellent news for investors. And by focusing more on enterprise customers, there's the potential for its margins to get even wider.
Trading at 38 times earnings, Micron's stock may not look so cheap. But based on analysts' expectations, its forward price-to-earnings multiple is only 13, which is well below the S&P 500's average of 22. For growth investors, that means that this can still be an excellent investment to add to your portfolio today, especially if you're looking for a quality stock that can benefit from the AI gold rush.
