DRAM Demand Powers Micron's Growth: Can it Sustain Momentum?

Core Insights - Micron Technology's DRAM revenues increased by 47.3% year over year in Q2 fiscal 2025, reaching $6.12 billion, driven by demand in AI data centers, automotive, and mobile markets [2][11] - The DRAM segment, which constitutes 76% of Micron's total revenue, is experiencing significant growth due to rising average selling prices and strong demand for high-bandwidth memory (HBM) chips [2][4] - Micron is focusing on capacity expansion with a new DRAM fabrication facility in Boise, ID, supported by $6.1 billion from the CHIPS and Science Act, indicating sustained momentum in DRAM solutions [5][11] Financial Performance - Micron anticipates Q3 fiscal 2025 revenues of $8.80 billion, reflecting a year-over-year growth of 29.33% [6] - The Zacks Consensus Estimate for fiscal 2025 earnings suggests a remarkable year-over-year growth of 433%, while the 2026 estimate indicates a growth of 55.87% [13] Competitive Landscape - Micron operates in a highly consolidated global DRAM market, facing competition from major players like Samsung, SK Hynix, and Taiwan Semiconductor Manufacturing Company (TSMC) [7] - In the broader market, competitors such as Western Digital and Seagate also pose challenges, particularly in NAND and SSD segments [9] Valuation Metrics - Micron's forward price-to-sales ratio stands at 3.06X, which is lower than the industry average of 3.69X, suggesting potential undervaluation [12]