Micron (MU -1.00%) hasn't received as much attention as other chip stocks like Nvidia in the artificial intelligence (AI) era, but the memory-chip maker is emerging as one of many winners from the emerging technology.

Though the stock pulled back on its most recent earnings report, Micron's growth on a year-over-year basis was strong once again. Revenue in the quarter reached $8.05 billion, up 38% from the quarter a year ago, though it was down slightly on a sequential basis. Profits also jumped from a year ago, as adjusted earnings per share increased from $0.42 to $1.56.

Micron's impressive growth

Micron's growth is primarily driven by demand for high-bandwidth memory, a key component in AI applications. That's one reason why Nvidia is now Micron's biggest customer, and CEO Jensen Huang recently credited Micron in his CES keynote speech.

In Micron's most recent quarter, revenue from high-bandwidth memory reached $1 billion, and data center revenue tripled in the period, making up 55% of total revenue.

Despite that surging growth, Micron trades at a surprisingly cheap valuation, with a price-to-earnings ratio of just 18.3, and Wall Street expects adjusted EPS to reach $11.11 in fiscal 2026, meaning the stock trades at a P/E based on that forecast of less than 9.

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A cyclical discount

Despite its strong growth and the tailwinds in AI, Micron appears to trade at a discount because the business is highly cyclical and prone to price swings and supply gluts. As you can see from the chart below, it has a history of trading in cycles, even as the stock has moved upward over time.

MU data by YCharts

The combination of low valuation, strong growth, and the tailwinds in AI could drive a surge in the stock over the next three years, especially as the company is adding new foundries and benefiting from the CHIPS Act.

Micron is in a great position to double or better over the next three years, as AI spending is expected to grow.