How Micron Stock Could Be an Even Bigger Winner Than GOOGL from a Google-Meta Deal

The rapid proliferation of artificial intelligence (AI) is tremendously boosting Micron's (MU) top and bottom lines and will likely continue to do so going forward. One of MU's biggest opportunities in the AI space involves selling its high-bandwidth memory chips to Alphabet's (GOOG) (GOOGL) Google. Given MU's almost absurdly low valuation, its shares are likely to get a much bigger boost than Google if the tech giant's potential chip deal with Meta (META) materializes. 

And in any event, Micron's shares look poised to boom over the longer term as the AI revolution continues. 

About Micron

A top developer of memory chips that are used to power a wide variety of computing devices and AI data centers, Micron has a high market capitalization of $266 billion. 

However, the shares have a relatively low trailing price-earnings ratio of 30.2 times and an extremely low forward P/E ratio of 14.8. The stock's valuation is particularly cheap in light of the firm's strong growth. In the company's fiscal year that ended in August, for example, its revenue jumped to $37.38 billion from $25.11 billion during the previous year, while its operating cash flow soared to $17.5 billion from $8.5 billion. 

MU stock climbed 99% in the three months that ended on Nov. 29, as many on the Street are apparently appreciating for the first time the company's ability to benefit tremendously from the AI boom for many years to come.

Google's Potential Deals Could Boost Micron

Meta reportedly held talks about buying billions of dollars of Google's Tensor Processing Unit (TPU) chips. TPUs, according to Google, “are custom-designed AI accelerators, which are optimized for training and inference of AI models.” Meanwhile, start-up Anthropic, which has become a major competitor of OpenAI, will buy up to 1 million TPU chips, and Salesforce (CRM) CEO plans to use Google's Gemini 3 AI model instead of OpenAI going forward, indicating that Salesforce itself could follow suit.

Micron looks poised to get a big lift from Google's success, as Japanese bank Mizuho recently stated that Micron would be boosted by the proliferation of TPUs. Further, the bank predicted that the chip maker may provide better-than-expected guidance for its quarter that ends in February. 

Micron's Days of Short Boom-and-Bust Cycles May Be Over

Historically, Micron's memory chip business was characterized by relatively short “boom-and-bust” cycles. Specifically, the demand for its chip would soar, prompting MU and its competitors to greatly increase their supply of processors. Eventually, due to these capacity surges, the prices of the chips would tumble, causing MU's top and bottom lines to sink sharply.

But amid the AI boom, it appears that the demand for Micron's AI chips will be insatiable for the foreseeable future. Providing evidence for this theory, companies are currently enduring an acute “memory chip shortage” due to the proliferation of AI servers. Moreover, HP (HPE) indicated that the shortages could become very acute in the second half of next year, Counterpoint Research predicted that memory module prices would jump 50% between now and Q2 of 2026, and Dell (DELL) reported that it had never seen the prices of the chips increase so quickly. 

With businesses seeing increased productivity from AI and individuals using AI in many aspects of their daily lives, the use of the technology by both firms and consumers is likely to continue growing rapidly for many years. Further, AI will probably be incorporated into many more products, such as robots, self-driving vehicles, and an ever-increasing number of coders and customer-service representatives.

In this environment, the demand for memory chips is likely to continue to be insatiable for many years to come.