Micron Projects $100 Billion HBM Market by 2028 Amid Ongoing Supply Constraints Until 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 17 2025
0mins
Source: SeekingAlpha
Management Performance: Micron Technology reported a strong start to fiscal Q1 2026, with record revenue, gross margin, and EPS exceeding guidance, driven by high demand and tight supply in the DRAM and NAND markets.
Market Outlook: The company anticipates significant growth in the HBM total addressable market, projecting it to reach $100 billion by 2028, two years earlier than previously expected, while also increasing fiscal 2026 CapEx to $20 billion.
Financial Results: Fiscal Q1 revenue reached $13.6 billion, marking a 21% sequential increase and a 57% year-over-year rise, with DRAM and NAND revenues also showing substantial growth.
Risks and Challenges: Despite strong performance, Micron faces ongoing supply constraints and challenges in meeting customer demand, with management acknowledging risks related to cleanroom space and potential tariffs impacting future operations.
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Analyst Views on MU
Wall Street analysts forecast MU stock price to fall
26 Analyst Rating
24 Buy
2 Hold
0 Sell
Strong Buy
Current: 456.230
Low
235.00
Averages
336.12
High
500.00
Current: 456.230
Low
235.00
Averages
336.12
High
500.00
About MU
Micron Technology, Inc. provides memory and storage solutions. The Company delivers a portfolio of high-performance dynamic random-access memory (DRAM), NAND, and NOR memory and storage products through its Micron and Crucial brands. The Company's products enable advancing in artificial intelligence (AI) and compute-intensive applications. Its segments include Cloud Memory Business Unit (CMBU), Core Data Center Business Unit (CDBU), Mobile and Client Business Unit (MCBU) and Automotive and Embedded Business Unit (AEBU). CMBU is focused on memory solutions for large hyperscale cloud customers, and high bandwidth memory (HBM) for all data center customers. CDBU is focused on memory solutions for mid-tier cloud, enterprise, and OEM data center customers and storage solutions for all data center customers. MCBU is focused on memory and storage solutions for mobile and client segments. AEBU is focused on memory and storage solutions for the automotive, industrial, and consumer segments.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Financial Performance: Micron Technology reported $13.6 billion in revenue for Q1 FY2026, a 57% year-over-year increase, and $23.9 billion for Q2, a staggering 196% increase, exceeding the $18.7 billion guidance, indicating robust demand in the AI hardware market.
- Future Revenue Expectations: The company anticipates $33.5 billion in revenue for Q3 FY2026, more than tripling the revenue from Q3 FY2025, reflecting its sustained growth potential in the memory market.
- Expansion Investment Plans: Micron is investing $100 billion to build the largest semiconductor factory in upstate New York, aimed at addressing memory shortages and driving long-term business growth over the coming years.
- Market Competitive Advantage: Despite Alphabet's new algorithm slightly alleviating memory shortages, Micron's market share and strong 41.5% net profit margin maintain its competitive edge, with a PEG ratio of 0.39 indicating that its stock remains attractive.
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- Strong Financial Performance: Micron Technology reported $13.6 billion in revenue for Q1 FY2026, a 57% year-over-year increase, and $23.9 billion for Q2, a staggering 196% increase, exceeding the $18.7 billion guidance, indicating robust demand in the AI hardware market.
- Future Revenue Expectations: The company anticipates $33.5 billion in revenue for Q3 FY2026, more than tripling the revenue from Q3 FY2025, reflecting its sustained growth potential in the memory market.
- Expansion Investment Plans: Micron is investing $100 billion to build the largest semiconductor factory in upstate New York, aimed at addressing memory shortages and driving long-term business growth over the coming years.
- Market Competitive Advantage: Despite Alphabet's new algorithm slightly alleviating memory shortages, Micron's market share and strong 41.5% net profit margin maintain its competitive edge, with a PEG ratio of 0.39 indicating that its stock remains attractive.
See More
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- Memory Shortage Theme: The Roundhill Memory ETF aims to capitalize on the memory shortage investment opportunity, having attracted $245 million in assets under management since its April 2 debut, indicating strong market demand and investor interest.
- High Market Concentration: This ETF holds only nine stocks, with SK Hynix, Micron Technology, and Samsung Electronics comprising 73% of its portfolio, highlighting a significant concentration that may increase investment risk.
- Investor Access Convenience: The Roundhill ETF provides an easy entry point for investors looking to participate in the memory trade without picking individual stocks, addressing the lack of direct investment options for SK Hynix and Samsung in traditional semiconductor ETFs.
- Fee Structure Consideration: With an annual fee of 0.65%, this ETF is more expensive than many low-cost ETFs that investors are accustomed to, prompting careful evaluation of its long-term performance against its costs.
See More
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- Nasdaq Performance: The Nasdaq index has gained 11% in April, marking its best performance in nearly four years and the highest April gain in 40 years, indicating a strong market rebound trend.
- Chip Companies Surge: Memory chip companies like SanDisk, Seagate, and Micron have seen gains of 44%, 37%, and 36% respectively in April, driven by surging demand and price increases due to data center expansions, boosting overall market sentiment.
- Intel's Comeback: Under new CEO Lip-Bu Tan, Intel has surged 55% this month to reach a new record, demonstrating progress in its foundry business, particularly with the release of PC chips using the advanced 18A process.
- Amazon Leads Gains: Among the Nasdaq-100, Amazon has emerged as the top performer this month with a 20% increase, further solidifying its leadership position in the tech sector and attracting increased investor interest.
See More
Software Stocks Catch Up to Chip Stocks in Rebound
- Chip Stocks Surge: Since the March 30 bottom, the iShares Semiconductor ETF (SOXX) has surged over 30% in 12 trading days, indicating a strong recovery in the semiconductor sector and reflecting optimistic market expectations for semiconductor demand.
- Software Stocks Rebound: Over the last four trading days, the iShares Expanded Tech-Software Sector ETF (IGV) has jumped over 12%, marking the beginning of a rebound in software stocks, although their overall performance still lags behind chip stocks.
- Notable Individual Performers: In the software sector, Oracle (ORCL) has risen nearly 30% in four days, while other companies like Atlassian (TEAM) and Cloudflare (NET) have also posted double-digit gains, indicating a recovering market confidence in the software industry.
- Market Dynamics Shift: Despite the short-term rebound in software stocks, chip stocks continue to dominate the market, with Broadcom (AVGO) and Marvell (MRVL) up over 35% and 50%, respectively, suggesting that the recovery momentum in the semiconductor sector remains strong.
See More
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- Record for Momentum ETF: The iShares MSCI USA Momentum Factor ETF (MTUM) hit a new high on Thursday, marking its tenth consecutive winning session, reflecting strong market confidence in growth stocks and suggesting a potential upward trend for the overall market.
- Market Rebound Signs: MTUM, which was down over 7% year-to-date, has now risen 8%, coinciding with the S&P 500's recovery, indicating that the market may be experiencing a broader rebound as investor sentiment turns optimistic.
- Outstanding Stock Performance: Since the onset of the Iran war, Bloom Energy's stock has surged over 40%, while Intel has also risen more than 40%, showcasing the appeal of momentum stocks, particularly following expanded partnerships with major tech companies.
- Momentum Drives Market: Jeff Kilburg, founder of KKM Financial, emphasized that momentum is the primary driver of market gains, predicting that the S&P 500 will reach new all-time highs, with the return of momentum providing strong support for the market.
See More
AMD's Rise and Prospects in the AI Market
- Market Performance Comparison: Over the past two years, Micron's stock has surged by 272%, while Palantir has seen an even larger increase of 527%; however, both companies are currently under pressure, with Palantir down 20% so far in 2026 and Micron experiencing volatility due to concerns over the sustainability of AI-driven memory demand.
- Significant AMD Deals: AMD's agreement with OpenAI to supply 6GW of GPUs over the next six months is expected to generate approximately $80 billion in revenue for AMD in the long run, significantly enhancing its market position in the AI sector.
- Meta Collaboration Potential: The multiyear deal with Meta also involves deploying 6GW of AMD's GPUs, which could similarly contribute another $80 billion to AMD's long-term revenue, further solidifying its standing in the AI data center market.
- Future Growth Expectations: Analysts forecast a 35% revenue increase for AMD in 2025, reaching $46.6 billion; combined with its relatively low forward P/E ratio of 39, AMD's stock could rise by 106% over the next three years, potentially pushing its market cap to $868 billion, surpassing the combined market caps of Palantir and Micron.
See More
