Micron Technology Leads AI Chip Market Surge
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- Revenue Surge: Micron Technology's total revenues soared 56% year-over-year to a record $13.6 billion in fiscal Q1 2026, with the cloud memory segment contributing $5.3 billion, reflecting strong demand and enhanced profitability in the data center market.
- High-Performance Chip Demand: Micron's HBM3E chip offers 50% more capacity and 30% lower energy consumption than competitors, leading major clients like Nvidia and AMD to embed it in their latest GPUs, further solidifying Micron's market position in AI.
- Future Growth Potential: Micron anticipates the data center HBM market will exceed $100 billion by 2028, with CEO predicting a 132% year-over-year revenue increase to $18.7 billion in fiscal Q2 2026, driving earnings growth of 480% to $8.19 per share, indicating a robust market outlook.
- Short Upgrade Cycle: As AI's demand for computing power rises, data center operators are purchasing new chips annually, positioning Micron's stock for continued upward momentum driven by this ultra-short upgrade cycle, although market expectations for future growth should be tempered.
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Analyst Views on MU
Wall Street analysts forecast MU stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for MU is 336.12 USD with a low forecast of 235.00 USD and a high forecast of 500.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
26 Analyst Rating
24 Buy
2 Hold
0 Sell
Strong Buy
Current: 435.790
Low
235.00
Averages
336.12
High
500.00
Current: 435.790
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 Compute and Networking Business Unit (CNBU), Mobile Business Unit (MBU), Embedded Business Unit (EBU), and Storage Business Unit (SBU). CNBU segment includes memory products and solutions sold into the data center, PC, graphics, and networking markets. MBU segment includes memory and storage products sold into the smartphone and other mobile-device markets. EBU segment includes memory and storage products and solutions sold into the intelligent edge through the automotive, industrial, and consumer embedded markets. SBU segment includes SSDs and component-level storage solutions sold into the data center, PC, and consumer markets.
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.
Micron Technology's High-Bandwidth Memory Chips Experience Rapid Growth
- Data Center Revenue Doubling: Micron Technology's data center revenue doubled to approximately $5.3 billion in the most recent quarter, reflecting strong demand in the AI sector and indicating potential for further overall performance growth.
- Significant Profitability Increase: In the first quarter of fiscal 2026, Micron's earnings soared to $4.60 per share, a 175% year-over-year increase, demonstrating enhanced pricing power in the high-bandwidth memory market and substantial profit growth.
- Expansive Market Outlook: Micron's CEO predicts that the data center high-bandwidth memory market will reach a value of over $100 billion by 2028, highlighting significant strategic opportunities for the company, especially as AI workloads gradually shift to personal devices.
- Production Capacity Expansion: Micron is ramping up production of its next-generation HBM4E chips, which are expected to improve capacity by 60% and energy efficiency by 20%, with the entire supply for 2026 already sold out, indicating strong market demand for its products.
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Micron Technology Rated Among Most Profitable NASDAQ Stocks
- Price Target Increase: Mizuho raised Micron Technology's price target from $390 to $480 while maintaining an Outperform rating, reflecting expectations for improved revenues and margins in the memory market by 2026, indicating strong market confidence in Micron's future performance.
- NAND Price Forecast: Mizuho anticipates NAND prices will rise by approximately 330% in 2026 compared to last year, with an additional 50% increase in 2027, despite flat production levels, suggesting significant profitability enhancements for Micron.
- Strong Market Demand: William Blair initiated coverage on Micron on January 22 with an Outperform rating, asserting that the company, as a major memory supplier, is well-positioned to capture market share as demand significantly outpaces supply, further solidifying its industry position.
- Earnings Growth Expectations: William Blair expects Micron's non-GAAP EPS to expand by over 275% in the coming years, indicating that the company's robust performance in the memory market will yield substantial returns for investors.
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