There may not be a better AI investment in the stock market than Micron Technology (MU -0.89%) right now. Micron has had a tremendous year and is the fourth-best-performing stock in the S&P 500 (^GSPC +0.65%), rising nearly 300% so far. However, I think it can repeat this performance next year.

That's a bold projection, but when you take a look at what's going on in Micron's business, I think it's a safe projection.

Micron's business is transforming

Micron manufactures memory chips. This business has historically been cyclical, rising and falling with waves in computing demand. AI is the biggest demand wave for memory chips that any firm in the industry has ever experienced, leading to incredible results. During the fourth quarter of fiscal year (FY) 2026 (ending Sept. 3), Micron's revenue rose 379% year over year. That's simply incredible, and it comes from rising memory chip prices due to shortages, as well as it maxing out its production capabilities.

However, every Micron investor is worried about a cyclical downturn that could wreck its current business state. But Micron doesn't see that happening anytime soon.

While the memory chip industry is in a tight spot in 2026, it's not going to get any better. Micron believes the situation will worsen in 2027 and 2028 until new production capacity becomes available. That will lead to another few years of soaring growth, but it's not done there.

Expand NASDAQ : MU Micron Technology Premium Feature Moneyball Superscore 91 /100 Today's Change ( -0.89 %) $ -9.58 Current Price $ 1,065.31 Key Data Points Market Cap $1.2T Market cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary. Day's Range $ 1055.56 - $ 1074.88 52wk Range $ 179.61 - $ 1255.00 Volume 10.5M Avg Vol 33.8M Gross Margin 85.86% Dividend Yield 0.05%

There are countless projections for the AI build-out to last through at least 2030, and chip suppliers like Micron are in an excellent spot to cash in as a result. With long-term visibility ahead, Micron is changing the way its business works. It is starting to sign strategic customer agreements that count for over a third of its estimated revenue through 2030. Many of these are "take-or-pay" agreements, which lock in revenue for Micron and make the company less exposed to cyclical downturns.

Micron's genius move to reshape the business to not be so cyclical will have lasting effects over the next decade. This is a huge development and should completely shift how the market thinks about Micron stock. However, the market is still pricing the stock like it's going to experience a cyclical downturn next year. That is a major investment opportunity that investors can't miss.

Micron's stock is priced cheaply

Many cyclical stocks don't command a premium because the market knows they're likely to enter a downturn soon. However, that may not happen for Micron for another five years. That leaves plenty of room for growth in the meantime, and I think it's one of the best values in the stock market. Right now, Micron trades for 15 times trailing earnings and 6.2 times forward earnings. Before Q4's earnings report, it traded in the low-20s, which I think is a fair price for Micron's stock. If you use Micron's forward earnings multiple, it tumbles to 6.2 times FY 2027 estimated earnings.

Should Micron rise back to 20 times earnings and meet investors' and analysts' expectations by the end of next year, that would drive up the stock's price -- potentially more than tripling it -- repeating this year's already impressive performance.

That return is sitting right in front of investors, and with the memory chip supply crunch unlikely to improve over the next few years, I think investing in Micron is a smart bet. Eventually, more investors will realize that Micron's demand wave isn't going to end anytime soon, which will spur a huge rally. Getting in before that realization would lock in huge returns, which is why I think Micron is a top AI investment to make right now.