Micron Technology (MU 3.07%) has historically been among the most frustrating semiconductor stocks for investors. Chip stocks are cyclical by nature, and the extreme fluctuations in the memory chip market have often wiped out the stock's gains from the most recent bull markets.

Fortunately, the rise of the cloud and artificial intelligence (AI) has changed the paradigm for Micron stock. Since bottoming in 2016, it has made significant gains. Also, unlike many industry cycles in the past, the stock has managed to maintain some of its gains, leading to considerable returns.

Micron's growth since 2016

In January 2016, Micron was in the midst of another industry pullback. However, it proved to be a fortuitous time to buy. Those who invested $10,000 at the low of $9.68 per share and held would now have 1,033 Micron shares, worth about $106,800 today!

Nonetheless, as mentioned before, the paradigm around Micron was different for much of its history. It first reached the $9.68 per share price in 1994, meaning the stock made no net gains for nearly 22 years! It also sold at a discount of about 90% from the stock's then-record high in 2000.

MU data by YCharts

Micron had also endured several boom-and-bust cycles between the dot-com bust and 2016. Thus, to profit from this investment rather than treat it as a trade, an investor would probably have to foresee the potential of the cloud and AI to bring innovation back to the memory chip space.

Fortunately, that innovation has served Micron and its shareholders well, and this cutting-edge technology has reduced the volatility in the memory chip market. As long as this more rapid pace of technical improvement remains, the long-term bull market in Micron stock should continue.