We recently compiled a list of the 10 Hot AI Stocks to Buy Now. In this article, we are going to take a look at where Micron Technology, Inc. (NASDAQ:MU) stands against the other hot AI stocks.
A disruptive breakthrough by a Chinese tech startup in January 2025 has shaken the artificial intelligence (AI) market to its core, triggering a sharp sell-off among tech stocks and compelling investors to rethink their exposure to expensive semiconductors and large hardware providers. In just a few days, this innovative AI model demonstrated performance on par with established Western systems while operating at a fraction of the cost, upending the long-held belief that cutting-edge artificial intelligence must be built on enormous capital outlays and massive computing infrastructures.
This unexpected development has exposed vulnerabilities in sectors that have relied heavily on high-cost hardware, sending ripples through investment strategies and forcing market participants to rapidly reexamine the economics of AI. With the rapid emergence of more cost-efficient, scalable models, investors are now witnessing a fundamental shift where technological efficiency and operational agility are beginning to outweigh the premium previously demanded for state-of-the-art AI performance.
This shift is compelling companies across the AI landscape to accelerate innovation and streamline operations as they adapt to a new era defined by lower training costs and more efficient architectures. Although regulatory and national security concerns continue to loom large – particularly regarding data privacy and the geopolitical implications of relying on foreign-developed technologies – the promise of significantly reduced capital expenditures is reshaping the competitive dynamics of the sector. The advent of these efficient, cost-effective models forces large hardware providers and entrenched tech giants to reevaluate their strategies, while simultaneously opening the door to a broader array of investment opportunities that are less dependent on massive budgets and intensive computing resources. For investors, the rapid evolution toward these scalable solutions presents an opportunity to capture long-term value in a market that is becoming increasingly competitive and diversified, as the traditional paradigms of AI development give way to more sustainable and innovative approaches. With this, we will take a look at some hot stocks to buy in the AI sector.
Our Methodology
We shortlisted 10 names with large exposure to the AI megatrend according to ETF databases. We ranked the names by the magnitude of positive revision in 2026 EPS estimates in the last twelve months from Wall Street analyst consensus (street). Our belief is that significant upward revision in EPS estimates from leading analysts serves as confirmation that companies are genuinely benefiting from the AI-related tailwinds and are well-positioned to capitalize on future growth opportunities driven by these advancements. For all the companies mentioned we also include the number of hedge funds that own it.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
A close-up view of a computer motherboard with integrated semiconductor chips.
Micron Technology, Inc. (NASDAQ:MU)
Magnitude of revision in street 2026 EPS estimates: +25%
Number of Hedge Fund Holders: 107
Micron Technology, Inc. (NASDAQ:MU) is a top global semiconductor company focused on memory and storage chips. Its main revenue comes from DRAM, with additional contributions from NAND flash chips. The company provides chips for data centers, mobile devices, consumer electronics, industrial applications, and automotive use, leveraging a vertically integrated business model to serve a diverse global market.
Recently, Micron Technology, Inc. (NASDAQ:MU) has faced varied effects due to changes in the AI and broader technology markets. The company has seen a rise in demand for its high-bandwidth memory (HBM) chips, essential for AI applications, resulting in an accelerating revenue growth outlook. However, the company still faces challenges, such as a decrease in demand for memory chips used in personal computers and smartphones, which contributes to a more cautious outlook. Despite these difficulties, MU’s strategic emphasis on AI-related technologies places it well for future growth. In the HBM segment, the company is progressing well with its 12-high stack product, which offers 20% less power than competitors’ 8-high stack at 50% more capacity. The company maintains a strong positioning in data center demand for DRAM, though eSSD is experiencing a digestion period. Looking ahead, Micron Technology, Inc. (NASDAQ:MU) expects industry conditions to support improved margins, with HBM volumes projected to increase in the second half of 2025.
Overall MU ranks 7th on our list of the hot AI stocks to buy now. While we acknowledge the potential of MU as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
