Up 101% This Year, Could This Artificial Intelligence (AI) Stock Double Again?

AI Stock Defies Gravity With 101% Surge - But Can The Rally Continue?

The Algorithmic Edge

This isn't just another tech play riding the AI hype cycle. The company's proprietary neural networks process market data at speeds that leave traditional quant funds in the digital dust. Their infrastructure bypasses legacy systems entirely, cutting latency to near-instantaneous levels.

Institutional Money Floodgates

Hedge funds and asset managers pile into positions, chasing the kind of returns that make bond traders weep into their Bloomberg terminals. The stock's volatility shakes out weak hands while algorithmic traders feast on the price swings.

The Double-Down Dilemma

Another 100% gain would require maintaining this blistering pace despite increasing regulatory scrutiny and competitors emerging daily. The company either dominates its niche or becomes another case study in disruptive technology meeting old-fashioned profit-taking.

Wall Street analysts can't decide if this is the next NVIDIA or just another overhyped ticker destined for the graveyard of 'next big things' - right beside those blockchain ETFs your financial advisor swore would change everything.

Data by YCharts.

In September alone, Micron's stock price has been on a tear, jumping 43% as the outlook in the memory sector has improved.

What's driving Micron higher?

In an era where the TRUMP administration has been pushing for more semiconductor production in the U.S., Micron finds itself in an advantageous position because it both designs and manufactures chips in the U.S. Micron was awarded $6.2 billion by the CHIPS Act (approved during the Biden administration), and it's benefited from threats against foreign semiconductor companies. For example, earlier this month, the stock popped as President Donald Trump said he would impose tariffs on semiconductor companies not moving production to the U.S.

The outlook for the memory chip sector has been improving over the last few weeks, along with the broader bullish trend. Micron, like its memory chip peersand, has been seeing booming demand for high-bandwidth memory (HBM), which is a key component in AI chips. In fact, shares of Micron climbed when SK Hynix rolled out its advanced HBM4 chip, a sign of general enthusiasm for the memory sector.

In its fiscal third quarter, revenue ROSE 37% to $9.3 billion, driven by a surge in HBM revenue, which was up nearly 50% on a sequential basis. Data center revenue more than doubled on a year-over-year basis, and through the first three quarters of the year, Micron's share of revenue from the data center rose from 30% to 55%.

Reflecting its momentum, Micron raised its fourth-quarter guidance last month, calling for revenue of around $11.2 billion, up from a previous range of around $10.7 billion, and it raised its adjusted earnings per share guidance from a midpoint of $2.50 to a midpoint of $2.85.

Image source: Getty Images.

Why Micron could double again

Unlike most of its AI peers, Micron still trades at a low price-to-earnings ratio. Based on fiscal 2026 estimates, the stock trades at just 12 times earnings, and estimates keep going up. The memory industry is notorious for boom-and-bust cycles, but that could be changing with the arrival and the proliferation of high-bandwidth memory, as the sector now seems tied to the AI boom.

In HBM, demand is still outpacing supply. Micron already sold out all of its HBM inventory for 2025, and demand is still soaring as the market for HBM is expected to grow from $18 billion in 2024 to $35 billion in 2025.

Given the momentum in AI and the gargantuan sums of money flowing into capital expenditures on AI for hardware like HBM, Micron and its memory peers figure to be winners. Though the sector is prone to cyclicality, Micron has a history of making large profits when the industry is healthy, and its margins could still MOVE significantly higher from here, given the excess demand for HBM.

We'll learn more when the company reports fourth-quarter earnings on Tuesday. Keep an eye on its fiscal 2026 guidance. If that tops expectations, the stock could surge again.