Micron and Nvidia look like genius buys now. This article suggests two AI hardware stocks, Micron and Nvidia, as smart investments due to their significant roles in the AI build-out and current market dips, anticipating substantial growth through 2026 and 2027.
Micron
Micron's stock has performed exceptionally well this year, driven by a shortage in the memory chip market and soaring prices. Wall Street projects an 80% growth for the company in its fiscal year 2027. Despite a recent stock sell-off due to investor concerns about AI demand longevity, Micron expects the memory chip undersupply to continue beyond 2027, even with new production capacity coming online. The increasing AI infrastructure build-out, projected to accelerate until 2030, suggests strong medium-term tailwinds for Micron, making it a compelling buy on the dip.
Nvidia
Nvidia, a key provider of GPUs for AI computing, also utilizes Micron's memory chips. The demand for Nvidia's processors is expected to surge, with hyperscalers' data center capital expenditures projected to rise from $650 billion in 2026 to $1 trillion in 2027. Nvidia has likely already secured most of its 2027 product orders, possessing valuable foresight into the tech sector's future. Despite this positive outlook, Nvidia's stock trades at an attractive 23.1 times forward earnings, which is lower than the S&P 500's trailing P/E. With analysts forecasting 42% growth for Nvidia in 2027, and a history of underestimating its growth, the stock presents a significant value opportunity as the market has yet to fully price in next year's anticipated growth.
Should you buy stock in Micron Technology right now?
While Micron Technology is a strong contender, the Motley Fool Stock Advisor analyst team has identified 10 other stocks they believe offer even greater returns. For instance, a $1,000 investment in Netflix in 2004 would now be $371,842, and the same investment in Nvidia in 2005 would be $1,244,783. The Stock Advisor's average return is 900%, significantly outperforming the S&P 500's 207%. Investors are encouraged to explore this latest top 10 list, available through Stock Advisor, to discover other potentially high-growth opportunities, noting that past performance does not guarantee future results.
