The artificial intelligence (AI) buildout is facing a memory bottleneck, and that has sent shares of Micron Technology (MU 2.89%) soaring. The memory and storage company is up 314% over the last year as of Feb. 13.
If you haven't invested in Micron yet, you may be wondering whether you missed the boat. But even at the current share price, Micron is in a position to deliver continued growth.
Image source: Micron Technology.
Micron now trades at 39 times trailing earnings. It's somewhat expensive by that metric, but still in the range you'd expect from fast-growing tech stocks. For comparison, the tech-heavy Nasdaq-100 index has a price-to-earnings (P/E) ratio of 33 right now, and Nvidia trades at 45 times trailing earnings.
However, Micron looks far less expensive when analyzed based on estimated future earnings. It trades at just 12 times forward earnings. At the same time, Nvidia shares cost 24 times forward earnings. This lower multiple doesn't mean Micron is a better investment than Nvidia, but it does mean that each dollar of projected income costs you half as much.
NASDAQ: MU
Key Data Points
The large gap between Micron's trailing and forward P/E ratios suggests earnings could explode over the next year, and given the memory shortage, that looks like a safe bet. Micron reported net income of $5.2 billion in the first quarter of its 2026 fiscal year, nearly three times as much as it made a year prior, and it has already sold out its memory capacity for 2026.
Memory has traditionally been a cyclical business, but AI chips are driving unprecedented demand. It's certainly not too late to buy Micron stock, as its earnings should continue to grow rapidly in 2026 and likely 2027, as well.
