You might think that stocks in the artificial intelligence (AI) market are on a roll right now. As of May 6, shares of AI hardware leader Nvidia(NASDAQ: NVDA) had gained 20.3% in 30 days. Tech-heavy portfolios like the Nasdaq Composite (NASDAQINDEX: ^IXIC) market index and the Ark Innovation ETF(NYSEMKT: ARKK) are up by 15.9% and 13.8%, respectively. These are massive single-month leaps, worthy of admiration in a normal economy.
But of course, I'm writing this overview one month after the Trump administration's "Liberation Day" tariff torrent on April 2. Those massive gains disappear almost completely if I stretch the chart just a couple of days further back:
And the volatile jitters started a bit earlier. Nvidia and the ARK Innovation fund are down by roughly 15% since the end of 2024, while the Nasdaq Composite index lost 8% over the same period. All three are showing double-digit drops from their 52-week highs.
From that perspective, it's easy to find bargain-priced AI stocks right now. Two of the best ideas on my desk today are memory chip maker Micron Technology(NASDAQ: MU) and digital advertising expert The Trade Desk(NASDAQ: TTD). Let me show you why this dynamic duo of AI stocks seems poised for great long-term returns at this juncture.
Micron Technology powers the world's smartest machines
Let's start with Micron. There are only three memory chip makers worth mentioning on the global market, with a combined market share of 95%. Micron is one of them, supplying about one-quarter of all the high-speed SDRAM chips to a memory-hungry world. It is also a leading provider of long-term storage NAND chips, though that segment is a bit more crowded with five large-scale manufacturers.
Memory chips have always been an important piece of the technology puzzle. You can't run a smartphone, a classic PC, or even an old Pac-Man game without SDRAM chips. The lightning-fast read and write speeds of NAND memory, also known as Flash memory, have made them ubiquitous in modern computers. And the amount of memory in each device keeps increasing, driven by larger programs and more advanced technologies.
Of course, the AI boom added more fuel to these fires. Ultra-fast high bandwidth memory (HBM) is particularly useful in the torrential data shuffling that goes into training large language models (LLMs) such as ChatGPT or Gemini.
Image source: Getty Images.
For example, Micron's HBM sales exceeded $1 billion for the first time in the recently reported second quarter of fiscal year 2025. That's 50% above the first quarter's HBM revenues.
"Our HBM shipments were ahead of our plans, demonstrating strong execution of our ongoing ramp," Micron CEO Sanjay Mehrotra said on the earnings call. "We are focused on growing HBM capacity in our existing manufacturing facilities to meet requirements through 2026."
And don't forget that Nvidia hand-picked Micron as the preferred memory supplier for its GB200 and GB300 AI systems. These are fully integrated "AI factories for enterprises" featuring several dozen of Nvidia's top-of-the-line Blackwell Ultra AI accelerators. So when Nvidia wins GB300 (or Blackwell) customers, Micron benefits from the related memory orders.
Yet, Micron's leading role in the AI revolution seems easy to forget. The stock is down 49% from last summer's all-time highs, trading at just 7.3 times forward earnings estimates or 2.9 times trailing sales. These are valuations more often seen in struggling retailers or financially strapped companies on the edge of bankruptcy. Micron is a thriving AI stock with high-octane sales growth and robust profits. I don't know about you, but Micron's stock looks like a no-brainer buy to me.
How The Trade Desk uses AI to stretch ad budgets
If Micron is a nuts-and-bolts play on the AI market's infrastructure, The Trade Desk is a great example of advanced technology companies putting AI tools to customer-friendly use.
The company launched an AI-based ad-buying system long before it was cool. The Koa AI platform has been around since June 2018, helping advertisers find the best channels and ad spots to publish their marketing campaigns. The more recent Kokai system goes a few steps further, bidding for ad spots and optimizing digital marketing budgets on the fly.
The Trade Desk is a fast-growing cash machine. The company has done well in times of tight ad-buying budgets, as its services can help ad buyers make the most of their limited assets. The lessons learned and relationships made in those tight spots tend to carry over when times are good again. Why not continue optimizing your marketing results when it's easier to find a few budget dollars?
The stock is down 61% from last December's record prices. In all fairness, The Trade Desk's shares probably deserved a correction at that lofty point. Even now, it trades at the generous valuation of 26 times forward earnings and 11.3 times sales. This isn't the stock for you if you can't stomach rich valuations for proven high-growth winners.
The rest of us can focus on The Trade Desk's all-weather business performance. This company knows how to make money even in an inflation-powered recession. I don't see why the next macroeconomic downturn should be different. The Trade Desk is a winning AI stock with plenty of growing left to do.
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Anders Bylund has positions in Micron Technology, Nvidia, and The Trade Desk. The Motley Fool has positions in and recommends Nvidia and The Trade Desk. The Motley Fool has a disclosure policy.
