Micron Stock Is Trading at 42x Trailing Earnings. Analysts Say That’s Still Cheap.

Semiconductor stocks have turned into Wall Street’s favorite AI trade. From giant data centers to advanced artificial intelligence (AI) models, almost every new wave of technology now depends on powerful chips running behind the scenes. And right in the middle of that rush sits the memory market, where companies like Micron Technology (MU) play a critical role supplying the DRAM and NAND storage needed to keep AI systems running.

That massive excitement has also sparked concerns that chip stocks may have climbed too far, too fast. But not everyone on Wall Street thinks the sector has entered bubble territory. Vivek Arya, senior semiconductor analyst at Bank of America Securities, recently argued that many semiconductor companies, including memory leader Micron, are still trading below their long-term historical valuation levels despite the strong AI-driven growth story unfolding.