The trillion-dollar club has three AI chip stocks, and another could join its ranks soon.
While artificial intelligence (AI) has made its mark in several sectors of the technology world, perhaps no industry has transformed more than semiconductors. Before the AI revolution was Nvidia (NVDA +1.53%), Taiwanese semiconductor manufacturing (TSM +2.21%)And Broadcom (AVGO 1.67%) were each seen as cyclical chip companies with unpredictable growth prospects.
Today, these three companies are multi-billion dollar companies driving the future of generative AI development. GPUs, accelerators, and custom application-specific integrated circuits (ASICs) have become the hardware backbone that supports how data workloads are processed and transferred.
Smart investors have started looking beyond the obvious winners of the AI semiconductor market and are starting to see which companies could emerge as the next member of the trillion-dollar club.
I predict that at the end of 2026 Micron technology (MU +0.52%) chip stock will be on everyone’s radar. Let’s delve into Micron’s importance in the chip value chain and understand why the company is positioned for explosive growth in the age of AI infrastructure.
Image source: Micron Technology.
What is Micron’s role in the AI chip industry?
Perhaps the biggest impact on generative AI yet is the introduction of large language models (LLMs) such as ChatGPT. While LLMs have proven to be incredibly useful, training these text-based models is really just the beginning of what AI can do.
Hyperscalers like Microsoft, Alphabet, AmazonAnd Metaplatforms have ambitions that go far beyond building chatbots. These companies have their eyes on next-generation services, including agentic AI, autonomous systems and robotics.
These more advanced applications require huge investments in inference: the ability of a trained model to make decisions. This means AI workloads are expanding at an unprecedented pace.
Against this backdrop, developers must ensure they supplement their GPU clusters with the resources necessary to enable smooth data transfers. Micron’s broad suite of high-bandwidth memory (HBM), dynamic random-access memory (DRAM) and NAND chips helps reduce data bottlenecks and ensure efficient memory and storage capabilities.
Today’s change
(0.52%)$2.07
Current price
$399.65
Key data points
Market capitalization
$450 billion
Day range
$390.74 -$412.43
Range of 52 weeks
$61.54 -$412.43
Volume
35M
Avg. full
29M
Gross margin
45.53%
Dividend yield
0.12%
Why 2026 could be Micron’s “Nvidia” moment
Rising demand from hyperscalers combined with tighter supply of chips has fueled rising prices in the memory and storage market. According to research from TrendForce, prices for DRAM and NAND chips could rise by 60% and 38%, respectively, in the first quarter.
For the first quarter of fiscal 2026 (ending November 27), Micron reported revenue of $13.6 billion, up 57% year over year. What’s impressive is that Micron’s revenue has accelerated in each of its core segments: cloud memory, core data, mobile, automotive and embedded devices. In addition, the company generated gross margins of at least 40% and operating margins of at least 30% in each business line.
These trends are important to understand because they underscore that not only are Micron’s products in high demand, but the company is able to produce lucrative unit economics across its entire business. Considering that the total addressable market for HBM is expected to reach $100 billion by 2028 – nearly triple its current size – Micron’s trajectory seems absolutely explosive.
As more infrastructure capital flows downstream from GPUs to HBM, Micron could be on the verge of a breakthrough moment, similar to what Nvidia experienced at the start of the AI revolution.
Micron stock looks poised for a breakout
Over the last twelve months, Micron generated $42 billion in revenue and approximately $10 in earnings per share (EPS). Thanks to the current memory chip super cycle, Wall Street is calling for monster growth over the next two years. Analysts predict Micron’s revenue will more than double by fiscal 2027, while earnings per share could nearly quadruple.
MU Earnings Data (TTM) according to YCharts
Despite the long-term tailwinds driving Micron’s growth, the company trades at a modest price-to-earnings (P/E) ratio of just 12.3. This is a meaningful discount for other chip leaders in their respective industries. For example, Nvidia, TSMC and Broadcom have achieved price-to-earnings ratios of 30 to almost 60 during the AI revolution.
While Micron is not a direct competitor to these companies, this benchmark shows how adjacent suppliers in the chip market have earned significant premiums given their importance to the AI story.
With Micron’s revenue and earnings profiles poised for significant acceleration in the coming years, I believe the company is positioned for substantial valuation expansion.
At a forward price-to-earnings ratio of 23 – which can still be considered discounted – Micron would have an implied market cap of about $850 billion. As more investors wake up to Micron’s indispensable role due to increased demand for memory chips, I think an earnings multiple of 30 is completely reasonable. At that point, Micron would reach a valuation of $1 trillion.
Since AI infrastructure is a multi-year, multi-billion dollar opportunity that’s just getting started, I see Micron stock as an attractive long-term stock to buy and hold through 2026 — all at a no-brainer value.
