ZACKSยท2025-06-10 15:26Core Insights - Micron Technology's high bandwidth memory (HBM) chips are gaining significant traction due to their increasing application in high-performance computing, hyperscalers, and AI data centers, with HBM revenues surpassing $1 billion in Q2 FY25 [2][10] - The company is fully sold out of its HBM supply for calendar 2025, driven by strong demand for its HBM3E and HBM3E-12H variants, which offer better power efficiency and higher memory capacity compared to competitors [3][10] - Micron's HBM market is projected to exceed $35 billion in 2025, with a focus on securing delivery agreements for 2026 [4] Company Performance - Micron is set to ramp up production of the next generation HBM4 in 2026, which will provide over 60% more bandwidth than HBM3E [5] - The company anticipates Q3 FY25 revenues of $8.80 billion, reflecting a year-over-year growth of 29.33% [6] - Micron's shares have increased by 31.8% year-to-date, outperforming the Zacks Computer - Integrated Systems industry, which grew by 15.1% [9] Competitive Landscape - The global HBM market is highly consolidated, with key players including SK hynix, TSMC, and Samsung, although not all directly compete with Micron [7] - SK hynix and TSMC are collaborating to develop HBM4 and next-generation packaging technology, which presents growth opportunities for Micron [8] Valuation and Earnings Estimates - Micron trades at a forward price-to-sales ratio of 2.84X, lower than the industry average of 3.53X [11] - The Zacks Consensus Estimate for Micron's fiscal 2025 earnings indicates a year-over-year growth of 433%, with a 55.87% growth estimate for 2026 [12]