The Motley Fool·2026-01-02 19:00Industry Overview - The memory industry is experiencing significant growth, with revenue expected to increase by 78% in 2024 to $170 billion and a further rise to $200 billion in 2025 [1][2] - Demand for high-bandwidth memory (HBM) in AI server chips is creating a supply shortage, leading to increased prices [2] Company Performance: Micron Technology - Micron Technology reported a 57% year-over-year revenue increase to $13.6 billion in the most recent quarter, with non-GAAP earnings rising nearly 2.7 times [3] - The company anticipates accelerated growth in the current quarter due to favorable demand-supply dynamics [3] - Micron has raised its fiscal 2026 capital expenditure budget to $20 billion, a 45% increase from the previous estimate, to support HBM demand [10] Company Performance: Lam Research - Lam Research's stock rose 143% in 2025, and it remains attractively valued at 11.5 times sales and 36 times forward earnings [12] - The company reported a 28% revenue increase to $5.32 billion in the last quarter, with earnings up 44%, attributed to HBM-related investments [14] - Lam Research expects robust spending on memory and semiconductor equipment in 2026, driven by AI-related demand [15] Market Dynamics - The HBM industry is projected to generate $100 billion in revenue by 2028, up from $35 billion in 2025, reflecting an annual growth rate of nearly 42% [7] - Lam Research estimates that for every $100 billion in data center investment, an additional $8 billion in wafer fabrication equipment spending is required [16] - The company anticipates a total addressable market expansion due to the booming demand for AI data centers [15][16] Future Outlook - Lam Research is expected to achieve $21.3 billion in revenue in the current fiscal year, a 15% increase from the prior year, with potential for exceeding expectations [17][19] - The overall semiconductor spending is expected to rise, benefiting companies like Lam Research involved in memory equipment [19]