Up 145% in 2025, This AI Infrastructure Stock Is Still Deeply Discounted
- - Up 145% in 2025, This AI Infrastructure Stock Is Still Deeply Discounted
Rich DupreyOctober 24, 2025 at 8:39 PM
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When it comes to artificial intelligence, a few names dominate the conversation like Nvidia (NASDAQ:NVDA), Taiwan Semiconductor Manufacturing (NYSE:TSM), or even Intel (NASDAQ:INTC) in recent months. These companies rightfully claim the spotlight.
These players drive the AI narrative because they deliver tangible results -- record revenues, market share gains, and innovations that fuel everything from chatbots to autonomous systems. Investors flock to them, bidding up shares on every earnings beat or product launch. Yet beneath the hype, AI's foundation relies on more than just processing power and fabrication prowess. Data storage and high-speed memory are the unsung necessities that enable seamless data flow, preventing bottlenecks in the AI pipeline.
Arguably, one stock stands as critical to AI's advance as these prominent players, yet it garners nowhere near the attention it deserves. Even with shares surging 145% year-to-date in 2025, this AI infrastructure powerhouse trades at bargain-basement valuations, offering a rare entry point for those betting on the sector's long-term explosion.
Why Memory Chips Are AI's Hidden Powerhouse
Micron Technology (NASDAQ:MU) is the leader in memory and storage solutions that are quietly becoming indispensable to the AI boom. At its core, Micron designs and produces dynamic random-access memory (DRAM) and NAND flash chips -- components that store and shuttle vast datasets during AI operations.
Without efficient memory, even the fastest GPUs from Nvidia would stall, as AI models require terabytes of data to train effectively. CEO Jensen Huang recently said "Micron's leadership in high-performance memory is invaluable to enabling the next generation of AI breakthroughs" the chipmaker is creating. Micron's high-bandwidth memory (HBM) technology, in particular, pairs with AI accelerators to deliver the speed and capacity needed for complex workloads like large language models.
Wall Street is finally stirring to Micron's potential. Analysts project the company will more than double its earnings this fiscal year to $16.68 per share, fueled by surging demand for AI data centers. Revenue is expected to climb 62% over the next two years, as hyperscalers like Amazon (NASDAQ:AMZN) and Google ramp up infrastructure. Over the next five years, earnings should grow at a 32% compound annual rate, outpacing many peers.
What makes this growth compelling is the pricing. MU stock trades at just 10 times forward earnings -- a stark discount in a market where AI darlings command premiums north of 40x. Its price-to-earnings-to-growth (PEG) ratio sits at just 0.19, signaling the stock is deeply undervalued relative to its expansion trajectory.
For context, that's cheaper than the broader semiconductor index and a fraction of NVDA's elevated multiple. In a sector prone to volatility, this setup screams opportunity for patient investors.
Is It Smarter to Wait for a Better Price?
Not everyone is rushing in. CNBC's Jim Cramer recently advised viewers to hold off on Micron, suggesting a pullback might offer a better entry. "Wait for it to come down," he said on a recent episode, citing short-term market jitters around memory pricing cycles and broader chip sector rotations. Cramer's take isn't baseless -- memory markets have historically swung with supply gluts and demand dips, and 2025's rally has left some wondering if valuations have overheated.
But for long-term holders eyeing AI's multi-decade run, this caution feels overly tactical. Micron is no longer just a cyclical play; it's pivoting hard into AI-specific innovations like HBM3E, which boasts 20 times the bandwidth of previous generations.
Partnerships with Nvidia and Advanced Micro Devices (NASDAQ:AMD) underscore its role in next-gen systems, and capacity expansions in the U.S. and Asia position it to capture rising orders. With AI infrastructure spending projected to hit $230 billion annually by 2027, according to Gartner, Micron's entrenched moat in memory could yield compounding returns. Dismissing it on near-term dips risks overlooking the bigger picture.
At current levels, MU stock's discounted forward P/E embeds ample margin for error, even if growth moderates. Smart money is already accumulating: institutional investors have shown increased interest in Micron, and options flow shows bullish bets on further upside.
Key Takeaway
Incorporating Micron into a core portfolio makes strategic sense for anyone serious about AI exposure. It's not just a bet on hype -- it's a stake in the plumbing that keeps the ecosystem humming.
Diversifying beyond the headline-grabbers reduces risk while tapping into undervalued growth. With earnings acceleration on the horizon and a valuation that lags the story, today's price looks like a gift. Pullbacks may come, but waiting indefinitely could mean paying up later.
For investors with at least a five-year horizon, MU stock offers a low-risk way to ride AI's wave without the froth.
Source: “AOL Money”
