Micron (NASDAQ: MU), one of the world's largest memory chipmakers, has been a major beneficiary of the AI boom. After suffering a severe slowdown in fiscal 2023 (which ended in Aug. 2023), its revenue surged 62% in fiscal 2024 and 49% in fiscal 2025.

Micron's sales of high-bandwidth memory (HBM) DRAM chips and NAND chips for enterprise solid-state drives (SSDs) in AI clusters in data centers fueled that growth, and that momentum should continue for the foreseeable future. Analysts expect its revenue to soar 248% in fiscal 2026, 91% in fiscal 2027, and finally cool down to 14% growth in fiscal 2028.

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That's why Micron's stock has rallied more than 1,000% over the past two years. But at $1,040 per share, it still looks surprising cheap at just six times next year's earnings. Let's see if Micron is still an undervalued growth play -- and where it might head over the next 12 months.

Why is Micron's business booming?

Micron isn't the world's largest producer of DRAM and NAND chips, but it generally produces more power-efficient chips than its larger competitors, Samsung and SK Hynix (NASDAQ: SKHY). As a U.S. chipmaker (which splits its manufacturing between its Asian and domestic fabs), Micron's business is partly subsidized by the U.S. government.

Over the past three years, Micron's HBM DRAM chips -- which stack layers of memory chips vertically to achieve higher data transfer speeds for AI applications -- skyrocketed. These chips are directly paired with Nvidia's (NASDAQ: NVDA) data center GPUs to train AI clusters. To store all of that information, those data centers bought more enterprise SSDs from Micron.

HBM chips require triple the wafer capacity of a standard DRAM chip, so their increased output throttled the production of Micron's lower-end chips for PCs and servers. That bottleneck drove up prices for all DRAM and NAND memory chips, and Micron's sales skyrocketed.

Where will Micron's stock be in a year?

Micron's stock trades at such a low multiple because it's still valued as a cyclical chipmaker. But if the AI boom lasts much longer than Micron's previous boom-and-bust cycles -- which mainly revolved around the PC and smartphone markets -- it could command a higher valuation.

Assuming Micron matches Wall Street's estimates through fiscal 2028 and still trades at six times forward earnings in a year, its stock would rise about 8% to $1,120 over the next 12 months. But if it trades at a more generous 10 times forward earnings, its stock could rise by another 80% to about $1,870. So even though Micron probably won't replicate its massive gains from the past two years, it still has plenty of upside potential if the AI boom continues.