What Is One of the Best Artificial Intelligence (AI) Stocks to Buy Now?
Key Points
The artificial intelligence industry continues to remain hot, elevating stock valuations.
Reasonably priced stocks are out there, but it's getting more difficult to identify them.
One AI company is growing revenue and continues to sport a compelling valuation.
- 10 stocks we like better than Micron Technology ›
The frenzy around artificial intelligence (AI) stocks continues unabated. A prime example is Nvidia. Its shares hit an all-time high on Oct. 9 after the U.S. government approved the sale of its AI semiconductor chips to the United Arab Emirates.
AI's popularity means many stocks in the sector are expensive. Finding a solid AI stock at a fair price can prove challenging. But there's one spectacular AI company with shares at a reasonable valuation that I'm watching.
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That company is Micron Technology (NASDAQ: MU). Here are the factors that make this one of the best AI stocks to scoop up right now.
Image source: Micron Technology.
Why Micron Technology stock is a buy
Micron is a maker of computer memory and storage products. AI systems depend on these components to store and retrieve the data needed to execute tasks.
As a result, Micron's business is on fire. In its 2025 fiscal year, ended Aug. 28, revenue hit $37.4 billion, a significant jump from $25.1 billion in the prior year.
Not only is revenue rising, Micron is also doing an excellent job managing its expenses. Consequently, its fiscal 2025 diluted earnings per share (EPS) saw a jaw-dropping increase to $7.59, compared to $0.70 last year.
Micron's spectacular business performance led to a rise in its stock price. However, shares retain a reasonable valuation for an AI stock based on the price-to-earnings (P/E) ratio. Here's how Micron compares to Nvidia.
Data by YCharts.
The chart above shows Micron's P/E ratio is about half that of Nvidia's, indicating it's a better value. Also, while Micron's earnings multiple is rising, it's still below where it was at the start of the year.
Micron's strong business performance and appealing valuation make it a solid AI stock to buy.
Should you invest $1,000 in Micron Technology right now?
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Robert Izquierdo has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
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