Micron (NASDAQ: MU) has been one of the biggest winners of the AI boom. The stock has surged roughly 700% over the past year as investors have piled into memory-chip makers, betting that soaring demand from AI infrastructure will keep driving higher sales and profits.

That rally has also made investors more cautious recently, with the stock pulling back from its June highs. With memory companies racing to expand capacity and some investors taking profits, questions are emerging over whether Micron can maintain its exceptional growth.

With this in mind, top investor Harsh Chauhan, who ranks among the top 1% of investors on TipRanks and contributes to The Motley Fool, has been mulling over whether the stock still has room to run.

Chauhan notes that Micron’s recent financial performance is difficult to ignore. Revenue soared nearly 4.5x year-over-year to $41.5 billion in the latest reported quarter, while adjusted earnings jumped to $25.11 per share, more than 13 times the year-ago figure.

Despite those gains, Micron’s valuation does not look particularly stretched. The stock trades at around 22 times trailing earnings and just six times forward earnings. Its price-to-sales ratio of 12 also looks less demanding when compared with the broader U.S. technology sector. The Nasdaq-100, for example, trades at significantly higher earnings multiples, at a trailing P/E of 34 and a forward P/E of 24. “So,” says the 5-star investor, “Micron looks like a screaming buy based on its valuation alone.”

However, the bigger concern is whether Micron can keep expanding its already enormous margins. Its non-GAAP operating margin reached 81.2% in fiscal Q3, up sharply from 26.8% a year earlier. Management expects gross margin to rise only modestly to about 86% in Q4, suggesting that the pace of margin expansion is beginning to cool. That helps explain why analysts expect earnings growth to slow by fiscal 2028 (beginning in September 2027).

Still, Chauhan believes the longer-term story remains compelling because memory demand is structurally strong. Supply is expected to remain below demand for years, potentially keeping pricing favorable. For instance, he notes that Citrini Research forecasts that the global DRAM shortfall could reach 28.7 exabytes by 2030.

Chauhan also points to Micron’s growing backlog of long-term agreements. The company had 16 such deals at the end of FQ3, with 14 expected to generate at least $100 billion in revenue over their contract lives. These agreements provide greater visibility even as the memory market evolves.

Bottom line, Chauhan sees the recent rally as less important than the underlying supply-and-demand dynamics. “All in all,” he summed up, “it isn’t too late for investors to buy this high-flying tech stock, as it will continue to benefit from the secular growth of the memory market.” (To watch Chauhan’s track record, click here)

The Street’s analysts also think Micron’s prospects are sound. Based on a lopsided mix of 30 Buys and 1 Hold, the stock claims a Strong Buy consensus rating. The forecast calls for 12-month returns of 66%, considering the average target clocks in at $1,556.55. (See Micron stock forecast)