How Micron Stock Surges 2x To $300

Core Insights - Micron Technology's stock has surged approximately 80% from about $87 to nearly $157, driven by increasing demand for high-bandwidth memory (HBM) products due to the rise of AI infrastructure [2][3] - Projected revenues for Micron are expected to rise by 48% this fiscal year and approximately 31% for FY'26, indicating robust growth potential [2][6] - Micron aims to capture 20-25% of the HBM market by the end of 2025, while also being the sole volume producer of low-power DRAM for data centers [5][6] Demand Drivers - The swift adoption of generative AI is significantly increasing the demand for high-performance memory, with HBM providing the necessary bandwidth and low latency for large language models [3][4] - Major tech companies, including Amazon, Alphabet, Microsoft, and Meta, are projected to invest a collective $364 billion in capital expenditures, further driving demand for AI-related infrastructure [4] Production Challenges - Manufacturing HBM is more complex than standard DRAM, requiring approximately three times as many wafers to produce the same quantity of bits, leading to supply constraints [5] - Micron's HBM production capacity for 2025 is already sold out, with strong demand anticipated for 2026 [5] Financial Projections - Micron's revenues surged by 58% from $21 billion in 2023 to $34 billion in 2024, with consensus forecasts indicating revenues climbing to approximately $37.1 billion in FY'25 and $48.7 billion in FY'26 [6][8] - HBM revenue is projected to reach a $10 billion run rate by 2026, contributing to overall revenue growth [7][8] Market Position and Competition - Micron is currently competing with SK Hynix, which holds about 50% of the HBM market share, particularly in HBM4 production [9] - Despite the competitive landscape, Micron's focus on HBM3E production and testing of HBM4 positions it for future growth [9] Long-term Outlook - If Micron achieves a conservative annual growth rate of 25% between FY'26 and FY'28, it could generate approximately $77 billion in revenues by FY'28, with potential net income of around $17 billion [8] - With a forward P/E ratio of about 20x, this could imply a market cap of around $340 billion, suggesting the stock price could nearly double from current levels [8]