Micron's (MU +0.06%) rally caught most investors by surprise. It quickly turned from a small AI play to a $1 trillion company. The stock has almost tripled this year, but it's down sharply due to a broad correction among AI stocks.
The stock is starting to rebound and recently crossed $900 again, but it's still trading at an incredible bargain. Here's why Micron looks compelling below $1,000 per share.
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Eye-popping growth is set to extend into multiple years
It's hard to find a company that quadrupled its revenue year over year and set the tone for more than 20% in projected sequential revenue growth in its upcoming fiscal 2026 fourth quarter. Micron did just that when it released earnings for its fiscal 2026 third quarter.
NASDAQ: MU
Key Data Points
Some bears have expressed concerns that the AI momentum will eventually slow. The fears are logical due to the history of boom-and-bust cycles for memory chips. Furthermore, the AI boom has brought substantial revenue growth for many companies. Bearish investors may point to that and say what goes up must come down.
However, there is a major difference with this cycle. Tech giants have been committing to high capital expenditures or raising their projected spending. Micron has also been securing multi-year contracts with its customers that offer meaningful revenue visibility.
Micron's financial performance has become more durable and predictable, per the company's Q3 fiscal year 2026 press release. That's an important detail when diving into the stock's valuation.
It's cheaper than bank stocks
Normally, stocks like Micron garner so much attention from investors that they end up with high valuations. This scenario results in many good companies that are bad stocks.
Micron is a rare exception. Not only is it growing faster than almost every publicly traded company while expanding profit margins, it's also cheaper than most bank stocks.
The S&P 500 Financials Sector has a price-to-earnings (P/E) ratio of 18. That's slightly lower than Micron's P/E ratio of 19, but Micron is growing substantially faster than every bank. The bargain becomes more apparent when looking at Micron's forward P/E ratio of 5.
A company posting Micron's growth rates is not supposed to be cheaper than mature bank stocks. In fact, it's still more affordable than every "Magnificent Seven" stock, and Micron's fundamental growth rates are outpacing all of those tech giants.
Memory has become a foundational piece of AI infrastructure. Tech giants do not want to miss out on this opportunity, despite rising prices. Amazon raised its 2026 capital expenditures forecast from $200 billion to $220 billion, citing rising memory costs.
With demand for Amazon Web Services reserved through 2028, the need for memory chips will accelerate from here. Amazon isn't the only company benefiting from its AI investments. The competition among big tech companies positions Micron well for multiple years, and it's a reality many investors are overlooking.
