The Most Undervalued Chip Stock to Own in 2026

• Leading memory supplier Micron Technology’s price-to-earnings ratio is much lower than other chip stocks.

• The insatiable demand for artificial intelligence chips is spreading to Micron’s memory products.

• There are risks, but the stock’s low P/E ratio relative to growth could lead to further gains.

• 10 stocks we like better than Micron Technology ›

The need for more chips and other components in data centers creates a huge opportunity for leading semiconductor companies. Demand for advanced chips is growing, but not all chip stocks are valued equally.

There are serious pricing errors among some industry leaders. Investors pay higher price-to-earnings (P/E) ratios for companies that perform consistently, e.g. NVIDIAbut with a lower P/E ratio Micron Technology (NASDAQ:MU) –Although Micron Technology’s current earnings growth is much faster.

While Micron Technology’s lower valuation reflects the cyclical nature of the memory market, a shortage of memory for artificial intelligence (AI) chips is creating a huge boost for Micron Technology’s growth. This rally may last longer than investors expect, pushing Micron Technology shares higher.

Given the stock’s parabolic rise over the past six months, investors may be wary of buying at the top. But Micron Technology’s share price is attractively valued, trading at just 11 times forward earnings. This is lower than Nvidia’s forward P/E ratio of 24 AMD‘ Move forward by a multiple of 35.

In addition, Wall Street analysts predict that Micron’s earnings will grow at an annualized rate of 50% in the next few years, higher than AMD’s 45% and Nvidia’s 36%. Micron may offer more growth at a better price. The question is whether current demand for advanced memory products is sustainable.

Wall Street expects Micron’s earnings to surge 294% to $32.67 a share this year and another 27% to $41.54 a share next year. The rebound in memory prices has been fueled by rising memory prices, driven by demand for data center graphics processing units (GPUs), of which Micron is a supplier to Nvidia.

These estimates are based on momentum already showing up in the results. In the last quarter, revenue increased by 57% year-on-year, and earnings increased by 175%. Management said on the previous earnings call that customers have expressed willingness to launch all high-bandwidth memory in 2026.

Additionally, a recent report from International Data Corporation (IDC) suggests that memory shortages may continue until 2027. One catalyst for this is Nvidia’s upcoming Rubin chips, which offer higher memory bandwidth to handle advanced AI workloads. This suggests that each new generation of Nvidia chips could benefit Micron as their memory bandwidth improves to handle future AI workloads.