Why Micron Stock Jumped 46% in the First Half of the Year

Core Viewpoint - AI and chip stocks, particularly Micron, have shown strong performance in 2025 despite earlier volatility due to tariff announcements, with Micron's stock rising significantly as investor sentiment improved [1][2]. Company Performance - Micron has experienced robust growth, especially in the AI and data center sectors, with a stock price increase of 46% in the first half of 2025 [2]. - The company reported a revenue increase of 37% year-over-year, reaching $9.3 billion, and adjusted earnings per share surged from $0.62 to $1.91, indicating improved margins [5]. - The data center segment has become a major revenue driver, accounting for over half of Micron's total revenue, with data center revenue more than doubling year-over-year [6]. Market Position - Micron is considered cyclically sensitive due to the nature of the memory chip market, which is characterized by price fluctuations and inventory challenges, leading to a lower valuation compared to other semiconductor stocks [4]. - The company currently has a trailing P/E ratio of 22 and a forward P/E of 10, suggesting potential for upside given its attractive valuation [4][9]. - As the only U.S. manufacturer of memory chips, Micron is strategically positioned to benefit from government initiatives aimed at reshoring industries, having received $6.6 billion under the CHIPS Act [8]. Recent Trends - Following a surge in stock price during May and June, Micron's stock has traded flat in recent weeks, indicating that strong growth expectations may already be reflected in the stock price [6][8]. - The company's future growth will depend on sustained demand for AI-related components, which remains a key focus area [8].