Is Micron Technology a Millionaire Maker?

Micron is looking like it might be the next AI hardware winner.

Thus far in the artificial intelligence (AI) boom, some of the biggest winners haven’t been the developers of AI software but the hardware companies that produce the chips that AI needs to function.

Nvidia (NVDA +8.01%) is the prime example. Because of AI’s demand for its graphics processing units (GPUs), it has become the most valuable company on the planet with a valuation of $4.2 trillion. It even briefly broke above $5 trillion late last year.

The company has already created an estimated 27,000 millionaires and likely stands to mint a few more. But it also begs the question of who’s next?

And I believe I may have an answer for you.

Image source: Getty Images.

Thanks for the memories

Based in Boise, Idaho, Micron Technology (MU +3.08%) primarily makes memory hardware, which includes random access memory (RAM) and dynamic random access memory (DRAM).

Computers rely on RAM chips to store and recall data. AI needs it for the same reason; it just needs a lot more than the 8-32 gigabytes or so most laptops do these days.

AI needs so much RAM, in fact, that tech hardware magazine Tom’s Hardware projects that data centers will consume 70% of all memory chips made this year, creating a critical memory shortage.

The shortage has already caused the cost of memory for smartphones to grow 10%-15% in 2026. And Intel‘s CEO Lip-Bu Tan recently said the memory problem was likely to continue for at least the next two years.

There’s going to be a lot of money to be made by producing memory over the second half of the 2020s. Micron has prepared for it by ending its consumer-market RAM production and breaking ground on a gigantic factory near Syracuse, New York.

Micron has already seen its share price jump over 300% over the past 12 months because of it. Despite that, it’s still trading at a bargain valuation relative to its competitors.