Micron Technology, Inc. ( MU ) reported much better-than-expected earnings for its first fiscal quarter of FY 2026 as the memory company generated record HBM-related revenue amid strong demand from the Data Center market. High bandwidth memory, orAnalyst’s Disclosure:I/we have a beneficial long position in the shares of MU, NVDA, AMD, AVGO, TSM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it ...

Core Insights - Micron Technology, Inc. reported significantly better-than-expected earnings for the first fiscal quarter of FY 2026, driven by record revenue from high bandwidth memory (HBM) due to strong demand in the Data Center market [1] Financial Performance - The company generated record HBM-related revenue, indicating robust performance in a key product segment [1] Market Demand - Strong demand from the Data Center market has been a critical factor contributing to the company's financial success in this quarter [1]

Core Viewpoint - Micron Technology, Inc. (NASDAQ:MU) is recognized as one of the best aggressive growth stocks, with analysts maintaining a positive outlook on its performance and market position, particularly in the high bandwidth memory (HBM) sector [1][5]. Group 1: Analyst Ratings and Price Targets - Mizuho analyst Vijay Rakesh reiterated an Outperform rating on Micron with a price target of $265 following discussions with company executives [1]. - Wells Fargo analyst Aaron Rakers raised the price target for Micron from $220 to $300, maintaining an Overweight rating after meetings with the CEO and other executives [5]. Group 2: Demand and Market Trends - Demand for high bandwidth memory (HBM) is expected to remain strong through 2026 and 2027, with approximately 40% of Micron's DRAM business projected to see revenue and margin improvements in the February quarter due to favorable pricing trends [2]. - The NAND flash memory business is experiencing disciplined capital expenditure, while demand for AI server applications is increasing for QLC enterprise solid-state drives (eSSDs) [4]. Group 3: Product Innovations and Roadmap - Mizuho is optimistic about Micron's HBM roadmap, which includes AI-specialized HBM4e and custom HBM solutions, expected to enhance DRAM content and pricing [3]. - Micron is recognized for its innovative memory and storage solutions, offering a range of high-performance DRAM, NAND, and NOR products [6].

Group 1 - Micron's stock has experienced a significant increase, rising 170% from its April lows, with a 40% gain since the end of August [1][2] - The company is benefiting from the AI data center boom, which has shifted perceptions from being viewed as a commodity shipmaker to a key player in the memory and storage market [2][3] - Micron reported a 46% year-over-year revenue increase and a nearly 22% increase from the previous quarter, exceeding expectations [4][5] Group 2 - The company's gross margin was reported at just under 46%, an increase of over 900 basis points year-over-year, while the operating margin improved by 1,250 basis points [4] - Micron's earnings per share reached $3.30, significantly higher than Wall Street's expectation of $2.55, marking a substantial increase from the previous quarter's earnings of $1.91 [5]

Core Viewpoint - Nvidia is expected to report strong Q2 earnings, driven by significant capital expenditures from hyperscalers for AI infrastructure, which may also positively impact Micron Technology's stock due to its role in the AI supply chain [5][9][10]. Group 1: Nvidia's Performance and Market Context - Nvidia is facing challenges this year due to various factors, including trade policies and its business in China, but remains on track for growth [2]. - The hyperscalers, including Microsoft, Alphabet, Amazon, and Meta Platforms, are making record capital expenditures to enhance their data centers and cloud computing capabilities, primarily focusing on AI [5][7]. - Taiwan Semiconductor Manufacturing Company (TSMC) reported $30 billion in revenue, indicating strong demand for Nvidia's GPUs, as TSMC is a key foundry partner [8]. Group 2: Micron Technology's Positioning - Micron Technology is positioned to benefit from the AI infrastructure boom, as high-performance memory chips are essential for processing the massive data loads generated by AI models [10][13]. - Large-scale initiatives like Project Stargate demonstrate the extensive buildout of data centers, which require advanced networking and high-performance memory [11]. - The shift from training AI models to deploying AI software in enterprise workflows necessitates robust hardware, further increasing demand for Micron's DRAM and high bandwidth memory (HBM) solutions [12][13]. Group 3: Investment Opportunity in Micron - Micron is trading at lower valuation levels compared to other semiconductor companies, which may indicate an undervaluation of its role in the AI infrastructure [17][21]. - Each dollar spent on AI GPUs increases the need for complementary solutions like HBM, positioning Micron as a direct beneficiary of AI infrastructure spending [20]. - The market has not fully recognized the importance of HBM in the next phase of AI growth, suggesting Micron represents an underappreciated investment opportunity [21].

Group 1 - Micron reported better-than-expected earnings and revenue, with shares rising in extended trading [1] - The company forecasts revenue of approximately $10.7 billion for its fiscal fourth quarter, a 38% increase from $7.75 billion a year earlier, exceeding the $9.9 billion average analyst estimate [1] - Total sales for the third quarter jumped 37% to $9.3 billion, compared to $6.81 billion a year ago [2][3] Group 2 - Data center revenue more than doubled in the third quarter, driven by soaring demand in the high bandwidth memory (HBM) market due to the artificial intelligence boom [2] - Earnings per share were reported at $1.91, adjusted, surpassing the expected $1.60 [3]