Key Points

• Micron is slated to benefit from a multiyear demand wave for memory chips.

• Even if peak margins slip, Micron will be a successful investment.

• 10 stocks we like better than Micron Technology ›

Micron Technology (NASDAQ: MU) has a major event coming up in a few days: its Q4 earnings for the fiscal year (FY) 2026. The last few times Micron has reported, it has announced some incredible results, and I expect this time to be no different. However, it's all part of a broader trend: Micron is a top-notch investment in the artificial intelligence (AI) arms race.

I think now is as good a time as any to invest in Micron stock, and if you've got $1,000 set aside, it seems like a fantastic idea.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

Micron's success may last longer than the market believes

Micron is a memory chipmaker that has historically been a boom-or-bust business. There isn't much that separates one memory chip manufacturer from another, which makes the chip more like a commodity, unlike logic chips, which can have major competitive advantages built into them. Demand for memory chips rises and falls based on computing demand, which is at an all-time high right now.

The AI build-out is consuming all available production capacity for memory chips, and none of the major providers can meet the red-hot demand created by AI hyperscalers. As a result, prices of memory chips are soaring.

Micron is doing its best to maximize production and to build new production facilities scheduled to go online in mid-2027 and 2028. Still, Micron's management team does not believe that the "tightness" in the memory chip market will be alleviated until sometime in 2028. Even after there is a bit more production capacity, that doesn't mean it will start a cyclical downturn.

One estimate from Nvidia indicates that its data center capital expenditures will continue to rise until 2030, reaching $3 trillion to $4 trillion annually. Considering that Nvidia expects the big five AI hyperscalers to spend about $1.3 trillion next year, that's a lot of growth ahead.

So, just because the peak of memory chip pricing may occur sometime next year, before new capacity is available, doesn't mean Micron will automatically be a bust in the following years. In fact, I expect it to be quite strong.

Micron can deal with lower margins in its business

If you look at the historical trend of Micron's profit margins, they've never been higher. Expecting Micron to sustain this margin level into 2028 and beyond isn't likely, but it could easily maintain margins of 30% or 40%.

Next year, Wall Street analysts expect $248 billion in revenue. That's a huge sum, but I could see revenue growth being little changed in 2028 as new production capacity comes online, which could cause memory chip prices to slip. Micron's volume would be higher, but revenue would be about the same.

If Micron trades at 20 times earnings, generates $248 billion in revenue, and has a 40% profit margin, that would give the company a market cap of $1.98 trillion. Currently, Micron is a $1.2 trillion business, and a gain of that size, or roughy 64%, would turn $1,000 into $1,640 in just a few years. Considering that the average annual return of the broader market is about 10%, which takes an investment seven years to double, this is an outstanding investment.

I think this rise could kick off on Sept. 30 when it releases earnings, especially if Micron's management tells investors that memory chip supply tightness could last even longer. Right now, Wall Street is assuming the worst, and that's your opportunity to pounce on a company that's thriving in an unprecedented demand wave.

Should you buy stock in Micron Technology right now?

Before you buy stock in Micron Technology, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Micron Technology wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $384,839!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,385,657!*

Now, it’s worth noting Stock Advisor’s total average return is 936% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

*Stock Advisor returns as of September 25, 2026.

Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Micron Technology and Nvidia. The Motley Fool has a disclosure policy.