OpenAI’s ChatGPT introduced generative AI four years ago, sparking a trend that continues to grow. Micron Technology’s stock has surged 600% in the past three years, catching up to early winners like Nvidia. The company’s reasonable valuation and strong revenue growth in the memory chip sector suggest continued success and potential for growth by the end of 2026.

Memory hardware is essential for generative AI, with analysts predicting AI companies to spend over half a trillion dollars on data center-related capital expenditures in 2026. Micron stands to benefit from this trend, with its cloud memory unit driving revenue growth and higher margins. Demand for memory hardware is soaring, leading to price hikes of up to 50%.

Micron’s cloud memory division boasts a gross margin of 66%, nearing Nvidia’s 73%. Price hikes in memory hardware are expected to continue, driving up Micron’s margins. With a forward P/E ratio of 12, the stock remains undervalued compared to its peers. Analysts predict a reasonable stock price of $500 by the end of 2026, representing a potential gain of over 30%.

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Read more at Nasdaq: Prediction: Micron’s Stock Price Will Reach This Level By the End of 2026