Micron Slips Ahead of Earnings: Is the AI Memory Demand Priced In?

Core Viewpoint - Micron Technology is experiencing a significant transformation in 2025, driven by its pivotal role in the artificial intelligence infrastructure buildout, leading to a remarkable stock performance with shares rising over 180% year-to-date [2][4]. Company Performance - Micron's stock surged from the $80-$90 range to nearly $265, reflecting a profound re-rating by investors [2]. - The company reported revenue of approximately $37 billion in fiscal 2025, marking a nearly 49% year-over-year increase, and achieved earnings exceeding $8 billion [4]. - The demand for high-bandwidth memory (HBM), essential for AI model training, has been a primary driver of this growth, with HBM supply for 2025 sold out earlier in the year [4]. Market Position and Partnerships - Micron's data center revenue improved significantly, supported by partnerships with industry leaders like Nvidia, which rely on Micron's HBM3E and upcoming HBM4 products [5]. - The company has gained market share in HBM against competitors such as SK Hynix and Samsung, bolstered by new facilities coming online [10]. Future Outlook - Analysts project revenue of approximately $12.7 billion for Q1 FY2026, representing a 46% year-over-year increase, with adjusted EPS expected to be around $3.91, more than double from the previous year [9]. - The AI memory market is forecasted to expand significantly, with HBM potentially doubling in size annually throughout the decade [10]. Stock Performance and Investor Sentiment - Despite a recent pullback of around 10% from all-time highs, Micron maintains a Zacks Rank 1 (Strong Buy), supported by consistent upward earnings estimate revisions [6][9]. - The stock's recent correction has improved its risk/reward profile, making it an attractive option for investors looking to build or add to positions [10][15].