While Micron Technology (MU 3.21%) stock has become popular with some tech enthusiasts, the company is not as widely known among investors as many other tech giants. Certainly it doesn't have the name recognition of other leading artificial intelligence (AI) chip stocks like Nvidia.
But Micron stock is up 309% over the past year, and could continue to surprise investors in 2026 as spending on AI infrastructure surges. Here's why picking up some shares of Micron could be a smart move right now.
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Micron is tapping into heavy demand for memory
Micron designs and manufactures memory chips, including those used in artificial intelligence data centers. Its dynamic random access memory (DRAM) and NAND flash memory lines are its two main growth drivers.
Soaring AI infrastructure spending last year -- totaling about $400 billion from the top tech companies alone -- has resulted in strong financial performances from Micron. In the company's fiscal 2026 first quarter (which ended Nov. 27), sales increased 56% to $13.6 billion, and non-GAAP (generally accepted accounting principles) earnings spiked by 167% to $4.78 per share.
Those figures would be impressive enough on their own, but it's worth noting that the company's gross margins increased too, rising by 11 percentage points to 56%. And management thinks there's even more room for improvement: Its guidance is for gross margins to reach 67% in its fiscal second quarter.
While flashier AI stocks get the lion's share of the attention, it's clear from Micron's rising sales and earnings that investors shouldn't overlook this lesser-known artificial intelligence play.
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Why Micron could continue to be a winner in 2026
A recent report from Counterpoint Research forecasts that memory chip prices could double this year compared to 2025, driven by surging demand that remains in excess of supply. That prediction was made toward the end of last year, and it's even more likely to prove accurate based on the recent announcements from leading AI companies that they've further increased their capital expenditure plans for this year.
On Alphabet's recent earnings call, for example, management said that it will double its capex to up to $185 billion in 2026. Similarly, Meta Platforms said it will nearly double its spending to up to $135 billion this year. Much of that spending is going to AI infrastructure.
These massive increases in spending align with Micron's expectations for the year, with management recently saying, "We expect server demand strength to continue in 2026."
As such, Micron is well positioned to benefit in 2026 and beyond. And with its price-to-earnings ratio at just 36, compared to the broader tech sector's average P/E of 47, investors can pick up this AI stock at a relative discount right now.
