Micron Technology’s Growth and Prospects

Recently, strong demand for memory chips has significantly boosted the company’s revenue and profits. Some analysts even predict that Micron Technology could see its profits double in the upcoming fiscal year, which sounds promising for its future.

But, investing in profitable AI stocks right now can feel a bit tricky, honestly. Many firms riding the AI wave are either priced too high or haven’t turned a profit due to substantial investments, or sometimes both. In this context, Micron stands out as somewhat of an exception. Its stock has jumped a remarkable 140% in 2025 so far, yet it still trades at a discount compared to a lot of other tech and AI stocks. This attractive valuation, alongside consistent sales and profit growth, may lead to even more gains for Micron.

To delve into the reasons behind this growth, let’s look closer.

Micron has demonstrated strong financial performance, which explains its incredible market surge in 2025. For its recently finished fiscal year, which ended on August 28, the company saw revenue rise by 49% year over year, totaling $37.4 billion. Their earnings also saw a notable rise, largely due to favorable pricing conditions in the memory chip sector.

Adjusted earnings per share skyrocketed from $1.30 the previous year to $8.29 in fiscal 2025. Operating margins nearly quadrupled, thanks to tight supplies and high demand for high-bandwidth memory (HBM) chips used in AI servers, which pushed prices up. However, some recent developments might make investors a bit anxious about whether this favorable pricing environment will hold.

Reportedly, Micron plans to cease selling memory chips for AI servers to customers in China. This follows a ban from the Chinese government in 2023 on memory products that are essential for the country’s infrastructure, leading Micron to exit the data center sector in China altogether.

Last fiscal year, Micron made only $2.6 billion from mainland China, accounting for about 7% of its total revenue. Interestingly, competitors like Lenovo are still actively selling data center memory chips to Chinese customers operating abroad, while Micron opts to focus on chips for cars, smartphones, and personal computers in China.

Meanwhile, the company is reallocating its data center memory resources to other markets following its withdrawal from the Chinese data center sector. Micron’s management expressed confidence during their latest earnings call, hinting at upcoming agreements to sell the remaining supply of HBM this fiscal year.

It shouldn’t be overly challenging for Micron to secure buyers for its HBM chips. This memory type is increasingly utilized in both graphics processing units (GPUs) and dedicated AI processors to handle cloud-based AI workloads. Goldman Sachs even projects a 23% rise in GPU-related HBM demand next year, and a staggering 82% surge in demand from custom AI processors.

The sales figures for Micron’s cloud memory business unit (CMBU), which is tasked with HBM sales, have tripled compared to last year, reaching $13.5 billion. With demand for HBM outstripping supply, Micron looks poised to expand its manufacturing capabilities. Overall, it’s likely the company will navigate this minor setback in China without major issues.

Long-term projections suggest HBM demand will remain robust, especially as companies could invest around $4 trillion in AI infrastructure by the end of the decade. Major players like Nvidia, Broadcom, and AMD have lined up significant orders for chips to be deployed in AI data centers, relying on Micron for HBM.

Currently, Micron has six customers for HBM chips, which indicates a solid chance of supplying major AI chip manufacturers. This should support the continuation of Micron’s impressive revenue growth.

We’ve already witnessed rapid revenue growth from Micron over the past year. Analysts expect this remarkable trend to persist this fiscal and potentially lead to double-digit growth in the following year.

The insight about Micron’s potential for doubling its revenue in fiscal 2026 seems realistic, especially since it trades at a reasonable 24 times its earnings. In comparison, the technology-heavy Nasdaq-100 index has a higher valuation at 33 times earnings. It wouldn’t be shocking to see Micron’s valuation increase as it continues its revenue growth. If it aligns with index performance and reaches $16.68 in earnings per share, the stock price could rise to $550, suggesting a possible 170% upside for investors looking to buy now.

However, before making any decisions about investing in Micron Technology, it’s worth considering that our analysts have found other promising stocks that they believe might generate substantial returns in the coming years—Micron wasn’t on that list.

In summary, while Micron shows potential, the investment landscape is broad. Careful consideration will help in making informed decisions.