Micron Technology's Stock Soars 250% Amid AI Demand Surge
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy MU?
Source: Fool
- Stock Surge: Micron Technology's stock has skyrocketed 250% since September, achieving a market cap exceeding $460 billion, reflecting strong market confidence in its future growth and raising questions about its potential to reach a $1 trillion valuation soon.
- Demand Drivers: The surge in demand for high bandwidth memory (HBM), particularly for AI training and inference, has led hyperscalers to increase their chip budgets, directly boosting Micron's sales, with projected earnings per share reaching $8.42 in 2026.
- Price Increases: Due to a shortage of DRAM memory chips, Micron's average selling price rose 20% sequentially in Q1, with gross margins expanding from 46% to 57%, enhancing the company's profitability and competitive position in a fierce market.
- Future Outlook: While Micron plans to invest $20 billion in capital expenditures for fiscal 2026, the cyclical nature of the industry suggests potential volatility in its earnings, with analysts raising their earnings expectations for 2026 and 2027 to $33.73 and $43.54 per share, respectively.
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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: 417.350
Low
235.00
Averages
336.12
High
500.00
Current: 417.350
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 Stock Soars 250% Amid AI Demand Surge
- Stock Surge: Micron Technology's stock has skyrocketed 250% since September, achieving a market cap exceeding $460 billion, reflecting strong market confidence in its future growth and raising questions about its potential to reach a $1 trillion valuation soon.
- Demand Drivers: The surge in demand for high bandwidth memory (HBM), particularly for AI training and inference, has led hyperscalers to increase their chip budgets, directly boosting Micron's sales, with projected earnings per share reaching $8.42 in 2026.
- Price Increases: Due to a shortage of DRAM memory chips, Micron's average selling price rose 20% sequentially in Q1, with gross margins expanding from 46% to 57%, enhancing the company's profitability and competitive position in a fierce market.
- Future Outlook: While Micron plans to invest $20 billion in capital expenditures for fiscal 2026, the cyclical nature of the industry suggests potential volatility in its earnings, with analysts raising their earnings expectations for 2026 and 2027 to $33.73 and $43.54 per share, respectively.
See More
Micron Invests $50 Billion in New Factories
- Massive Investment: Micron plans to invest $50 billion in Boise, Idaho, to build two new 600,000-square-foot chip factories, expected to open in mid-2027 and by the end of 2028, aimed at addressing the unprecedented global DRAM supply tightness.
- Global Expansion: In addition to the Boise factories, Micron is constructing a $100 billion facility in Syracuse, NY, and a $9.6 billion factory in Hiroshima, Japan, bringing total investments to $200 billion to break the AI memory bottleneck.
- Cash Flow and Financial Pressure: Although Micron generates over $22 billion in cash flow before capital expenditures, its cash reserves are only around $10 billion, indicating significant financial pressure that could impact future stability amid aggressive expansion plans.
- Market Reaction Volatility: Following the investment announcement, Micron's stock fell 3% but rebounded by 6.9%, reflecting market confidence in its long-term growth potential, although short-term risks related to DRAM price fluctuations remain a concern.
See More
Micron Technology Benefits from Memory Supercycle
- Surging Market Demand: Micron Technology's stock has risen 40% year-to-date, primarily benefiting from a supercycle in DRAM and NAND memory, indicating that this cycle is just beginning and showcasing strong market potential.
- AI-Driven Growth: The demand for DRAM has surged due to the buildout of artificial intelligence infrastructure, particularly for high bandwidth memory (HBM), which has significantly boosted Micron's sales growth.
- Tight Supply Chain: HBM production requires three times the wafer capacity of ordinary DRAM, leading to tight supply across the DRAM market and skyrocketing prices, which further enhances Micron's profitability.
- Strong Financial Performance: Micron reported a 57% year-over-year revenue increase last quarter, with gross margins expanding from 38.4% to 56%, demonstrating robust profitability and competitive strength amid ongoing supply constraints in the DRAM and NAND markets.
See More
Tech Giants Commit Billions to Indian AI Initiatives
- Massive Investment Commitments: Tech giants including Amazon, Microsoft, Meta, and Alphabet have announced plans to invest up to $700 billion in AI projects in India in 2023, reflecting the intense global competition and enthusiasm for AI technology.
- Reliance and Adani Plans: Indian tech group Reliance is set to invest $110 billion in data centers and infrastructure, while Adani outlines a $100 billion AI data center buildout over the next decade, further solidifying India's position in the global AI landscape.
- Microsoft and OpenAI Collaboration: At the Indian AI Impact Summit, Microsoft announced plans to invest $50 billion in the Global South by 2030, partnering with OpenAI and AMD to enhance India's AI capabilities, indicating a strong focus on the region's market potential.
- Deepening US-India Trade Cooperation: During the summit, India and the US signed the Pax Silica agreement aimed at securing the global supply chain for silicon-based technologies, further strengthening technological ties between the two nations.
See More
Humanoid Robots Are Approaching, but Cost Remains a Challenge.
Humanoid Robot Performance: NBC News reported on Unitree's Lunar New Year celebration, showcasing robots performing impressive feats like kung fu, back flips, and swordplay with remarkable speed and coordination.
Advancements in Robotics: The event highlights the rapid development of artificial-intelligence-trained robots capable of performing labor-saving tasks, aligning with recent discussions on the accelerating pace of the robot revolution.
See More
Investment Opportunities in the AI Infrastructure Revolution
- Surge in Capital Expenditure: Major tech companies like Microsoft, Amazon, and Google are set to spend nearly $700 billion on capital expenditures in 2023, driving demand for AI infrastructure despite overall market sell-offs.
- Broadcom's Market Positioning: Broadcom is capitalizing on the growth of AI infrastructure by providing custom silicon solutions for Meta and Alphabet, particularly benefiting from the rise in data center build-outs, thereby solidifying its leadership in the networking equipment market.
- Micron's Memory Solutions: Micron specializes in high-bandwidth memory (HBM) chips and is expected to sell out its inventory by 2026; with DRAM and NAND prices projected to rise, Micron will have significant pricing power to meet the memory demands of AI applications.
- Optimistic Investment Outlook: Against the backdrop of the AI infrastructure revolution, Broadcom and Micron are viewed as the new “pick-and-shovel” stocks, and investors may consider increasing their stakes in these two stocks during the current tech sell-off to capitalize on future growth opportunities.
See More
Micron Technology's Stock Soars 250% Amid AI Demand Surge
- Stock Surge: Micron Technology's stock has skyrocketed 250% since September, achieving a market cap exceeding $460 billion, reflecting strong market confidence in its future growth and raising questions about its potential to reach a $1 trillion valuation soon.
- Demand Drivers: The surge in demand for high bandwidth memory (HBM), particularly for AI training and inference, has led hyperscalers to increase their chip budgets, directly boosting Micron's sales, with projected earnings per share reaching $8.42 in 2026.
- Price Increases: Due to a shortage of DRAM memory chips, Micron's average selling price rose 20% sequentially in Q1, with gross margins expanding from 46% to 57%, enhancing the company's profitability and competitive position in a fierce market.
- Future Outlook: While Micron plans to invest $20 billion in capital expenditures for fiscal 2026, the cyclical nature of the industry suggests potential volatility in its earnings, with analysts raising their earnings expectations for 2026 and 2027 to $33.73 and $43.54 per share, respectively.
See More
Micron Invests $50 Billion in New Factories
- Massive Investment: Micron plans to invest $50 billion in Boise, Idaho, to build two new 600,000-square-foot chip factories, expected to open in mid-2027 and by the end of 2028, aimed at addressing the unprecedented global DRAM supply tightness.
- Global Expansion: In addition to the Boise factories, Micron is constructing a $100 billion facility in Syracuse, NY, and a $9.6 billion factory in Hiroshima, Japan, bringing total investments to $200 billion to break the AI memory bottleneck.
- Cash Flow and Financial Pressure: Although Micron generates over $22 billion in cash flow before capital expenditures, its cash reserves are only around $10 billion, indicating significant financial pressure that could impact future stability amid aggressive expansion plans.
- Market Reaction Volatility: Following the investment announcement, Micron's stock fell 3% but rebounded by 6.9%, reflecting market confidence in its long-term growth potential, although short-term risks related to DRAM price fluctuations remain a concern.
See More
Micron Technology Benefits from Memory Supercycle
- Surging Market Demand: Micron Technology's stock has risen 40% year-to-date, primarily benefiting from a supercycle in DRAM and NAND memory, indicating that this cycle is just beginning and showcasing strong market potential.
- AI-Driven Growth: The demand for DRAM has surged due to the buildout of artificial intelligence infrastructure, particularly for high bandwidth memory (HBM), which has significantly boosted Micron's sales growth.
- Tight Supply Chain: HBM production requires three times the wafer capacity of ordinary DRAM, leading to tight supply across the DRAM market and skyrocketing prices, which further enhances Micron's profitability.
- Strong Financial Performance: Micron reported a 57% year-over-year revenue increase last quarter, with gross margins expanding from 38.4% to 56%, demonstrating robust profitability and competitive strength amid ongoing supply constraints in the DRAM and NAND markets.
See More
Tech Giants Commit Billions to Indian AI Initiatives
- Massive Investment Commitments: Tech giants including Amazon, Microsoft, Meta, and Alphabet have announced plans to invest up to $700 billion in AI projects in India in 2023, reflecting the intense global competition and enthusiasm for AI technology.
- Reliance and Adani Plans: Indian tech group Reliance is set to invest $110 billion in data centers and infrastructure, while Adani outlines a $100 billion AI data center buildout over the next decade, further solidifying India's position in the global AI landscape.
- Microsoft and OpenAI Collaboration: At the Indian AI Impact Summit, Microsoft announced plans to invest $50 billion in the Global South by 2030, partnering with OpenAI and AMD to enhance India's AI capabilities, indicating a strong focus on the region's market potential.
- Deepening US-India Trade Cooperation: During the summit, India and the US signed the Pax Silica agreement aimed at securing the global supply chain for silicon-based technologies, further strengthening technological ties between the two nations.
See More
Humanoid Robots Are Approaching, but Cost Remains a Challenge.
Humanoid Robot Performance: NBC News reported on Unitree's Lunar New Year celebration, showcasing robots performing impressive feats like kung fu, back flips, and swordplay with remarkable speed and coordination.
Advancements in Robotics: The event highlights the rapid development of artificial-intelligence-trained robots capable of performing labor-saving tasks, aligning with recent discussions on the accelerating pace of the robot revolution.
See More
Investment Opportunities in the AI Infrastructure Revolution
- Surge in Capital Expenditure: Major tech companies like Microsoft, Amazon, and Google are set to spend nearly $700 billion on capital expenditures in 2023, driving demand for AI infrastructure despite overall market sell-offs.
- Broadcom's Market Positioning: Broadcom is capitalizing on the growth of AI infrastructure by providing custom silicon solutions for Meta and Alphabet, particularly benefiting from the rise in data center build-outs, thereby solidifying its leadership in the networking equipment market.
- Micron's Memory Solutions: Micron specializes in high-bandwidth memory (HBM) chips and is expected to sell out its inventory by 2026; with DRAM and NAND prices projected to rise, Micron will have significant pricing power to meet the memory demands of AI applications.
- Optimistic Investment Outlook: Against the backdrop of the AI infrastructure revolution, Broadcom and Micron are viewed as the new “pick-and-shovel” stocks, and investors may consider increasing their stakes in these two stocks during the current tech sell-off to capitalize on future growth opportunities.
See More
