Is Micron Stock Still a Buy in 2026 Amidst a Tipping-Point in AI Demand?

The global economy is at a crossroads. Artificial intelligence (AI) has transitioned from a speculative buzzword to a foundational pillar of technological progress, reshaping industries and redefining demand for critical infrastructure. At the heart of this transformation lies memory technology, where Micron Technology (MU) has emerged as a pivotal player. As 2026 unfolds, the question for investors is whether Micron's stock remains a compelling buy, given its strategic positioning in the AI-driven memory market and its valuation relative to future growth prospects.

Strategic Valuation: A Compelling Case for Undervaluation

Micron's financial performance in 2026 has defied pessimism. For Q1 FY 2026, the company reported record revenue of $13.6 billion, a 57% year-over-year increase, driven by surging demand for high-bandwidth memory (HBM) in data centers. This growth is underpinned by long-term supply constraints and pricing power, with HBM prices expected to rise by approximately 15% in December 2025 and continue climbing through 2026. Despite these tailwinds, Micron's stock trades at a striking discount relative to its future earnings potential. Analysts project that the company is currently valued at under 10 times its 2026 earnings outlook, a significant discount compared to AI-focused peers and the broader market.

This undervaluation is further reinforced by a wave of analyst upgrades in late 2025 and early 2026. Stifel's Brian Chin raised his price target from $195 to $300, while Citigroup's Christopher Danely increased his target to $300. KeyBanc and UBS even raised their targets to $450 and $400, respectively, citing robust AI demand and supply tightness. The average analyst price target across 39 analysts stands at $245.27, with a consensus "Outperform" rating. These upgrades reflect confidence in Micron's ability to sustain profitability amid constrained supply and rising demand.

Long-Term AI Infrastructure Growth: A Structural Tailwind

The AI infrastructure market is entering a phase of structural expansion. High-bandwidth memory, a critical component for training and running large AI models, is projected to see its total addressable market (TAM) grow from $35 billion in 2025 to $100 billion by 2028, expanding at a 40% compound annual growth rate. Micron's strategic roadmap aligns perfectly with this trajectory. The company is advancing HBM4, 1-gamma DRAM, and G9 NAND technologies, positioning itself to capture high-margin demand from hyperscalers and cloud providers.

Moreover, supply constraints are amplifying Micron's competitive advantage. Analysts estimate that 30% of end demand for HBM remains unmet in 2025, a gap that will normalize only by mid-2026 as new production capacity comes online. This temporary imbalance has allowed Micron to secure multi-year price and volume agreements with key clients, ensuring visibility into future cash flows. The company's capital expenditures have also surged to $20 billion, reflecting its commitment to expanding HBM capacity and advanced packaging capabilities.

Risks and Realities: A Balanced Perspective

While the case for Micron appears robust, investors must remain cognizant of risks. The normalization of supply constraints by mid-2026 could temper pricing power, and macroeconomic headwinds-such as slower GDP growth (projected at 1.4% in 2026)-may dampen business investment. Additionally, the banking sector's exposure to macroeconomic uncertainties could indirectly affect capital expenditures in AI infrastructure.

However, these risks are largely short-term. The long-term demand for AI-driven memory solutions is structural, driven by insatiable workloads in data centers and the proliferation of AI in edge computing. Micron's leadership in HBM and its disciplined approach to capacity expansion suggest it is well-positioned to navigate near-term volatility while capitalizing on multi-year growth.

Conclusion: A Buy for the Patient Investor

Micron Technology's stock offers a rare combination of undervaluation and long-term growth potential. At a forward P/E of under 10, the company is trading at a discount to its intrinsic value, even as it secures a dominant position in the AI memory market. Analysts' price targets, which range from $300 to $450, reflect confidence in its ability to deliver outsized returns. For investors with a multi-year horizon, Micron represents a compelling opportunity to participate in the AI revolution while benefiting from a favorable risk-reward profile.

In an era of technological disruption, patience and strategic foresight are rewarded. Micron's journey is far from over, and for those willing to look beyond near-term volatility, the rewards could be substantial.