AI Data Centers Are Choking on Memory: Is Micron a Buy After Its Monster Run?

By John Ballard – Mar 31, 2026 at 8:06PM ESTKey PointsAI is sending memory prices surging, and Micron is struggling to keep up with demand.Micron's earnings have soared over the past year, and analysts expect more growth through next year.Investors are still valuing the stock like a cyclical memory manufacturer.Shares of Micron Technology (MU +4.80%) have soared over the past year due to a shortage of high-performance memory for data centers. The company could see strong financial performance over the next few years, as demand remains well above supply. The key question investors need to answer before buying Micron today is whether this cycle is different. Will artificial intelligence (AI)-driven demand bring an end to the industry's boom-and-bust cycles in memory pricing, or will prices eventually tumble again, as they have in past cycles? One scenario could drive sizable gains over the next few years, while the other could lead to another drawdown in the share price. Micron's latest earnings report offers clues that can help investors decide whether the stock is worth buying at today's price. Image source: Micron Technology. AI-driven growth In the recent quarter, Micron's revenue tripled year over year to nearly $24 billion. Higher memory prices are juicing margins, sending earnings per share up from $1.41 in the year-ago quarter to $12.07. AI computing systems, including graphics processing units (GPUs), require advanced memory to handle massive amounts of data -- and right now, the industry can't make enough of it. Management noted on the earnings call that it continues to fulfill only about half to two-thirds of customer demand. The good news for investors is that the tight supply doesn't appear to be easing anytime soon. Management expects the shortage to persist through the end of 2026 and into next year, which should support higher earnings. Importantly, demand is coming from other markets beyond data centers. As consumer devices, like smartphones, use on-device AI processing, demand for memory will grow even further. Micron executives specifically called out the opportunity in humanoid robots, which they believe will require memory and storage capacities similar to those of a self-driving car. ExpandNASDAQ: MUMicron TechnologyToday's Change(4.80%) $15.46Current Price$337.26Key Data PointsMarket Cap$363BDay's Range$311.50 - $337.7052wk Range$61.54 - $471.34Volume3.1MAvg Vol39MGross Margin58.54%Dividend Yield0.19% Weighing the risks AI is a powerful demand driver, but it still doesn't eliminate this industry's cyclical risk. Micron and its competitors will chase demand by adding capacity, which could eventually lead to oversupply and lower memory prices. That additional supply should help Micron over the next couple of years, given how tight the market is. Analysts see earnings climbing to $58 per share in fiscal 2026 (ending in August) and $98 in fiscal 2027, then slipping to $77 in fiscal 2028 -- a sign that pricing could turn cyclical again as supply catches up. Because long-term earnings are so uncertain, this isn't a stock I'd want to buy and hold indefinitely, even if it has room to run in the next year or so. Micron averaged a forward price-to-earnings multiple of 8.3 over the past year, and now trades at 6.2 times this year's estimate and 3.6 times next year's. Those low earnings multiples suggest that investors don't view AI demand as a permanent stabilizer for memory pricing. Shares could still climb on today's shortages, but they could also drop sharply if the industry overbuilds manufacturing capacity. Investors who buy Micron stock should size their positions accordingly to account for volatility.Read NextMar 31, 2026 •By Marc GubertiWhy Savvy Investors Are Loading Up on These 2 Stocks Amid Market ChaosMar 31, 2026 •By Justin PopeMicron Technology Is Having Its Nvidia Moment.

Is It Still a Buy?Mar 31, 2026 •By Manali Pradhan, CFAShould You Buy Micron Stock Right Now After the Pullback?Mar 31, 2026 •By Keithen DruryBeyond Nvidia: This Under-the-Radar AI Stock Is Up Nearly 300% Over the Past YearMar 30, 2026 •By Emma NewberyStock Market Today, March 30: Micron Technology Falls on TurboQuant ShockMar 30, 2026 •By Rich SmithWhy Micron Stock Dropped Again TodayAbout the AuthorJohn Ballard has been a contributing writer at The Motley Fool since 2016, covering consumer goods and technology stocks. He holds a bachelor’s degree in business administration with a focus in real estate finance from the University of Arkansas at Little Rock.TMFRazorbackStocks MentionedMicron TechnologyNASDAQ: MU$337.26(+4.80%)+$15.46*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.