Micron: Riding the AI Memory Supercycle

Micron (NASDAQ: MU) is no longer just a cyclical memory name, it has become one of the most direct beneficiaries of the AI infrastructure buildout.

As hyperscalers ramp their capital spending on data centers, demand for high-bandwidth memory (HBM), DRAM, and high-capacity DIMMs has accelerated. Micron’s product roadmap is now aligned squarely with AI workloads, putting it in the same conversation as Nvidia and AMD when it comes to critical infrastructure.

A Record-Breaking Quarter

Micron’s latest results blew past expectations. Revenue surged 46% YoY to $11.3B, while EPS hit $3.03, both driven by strength in server DRAM and the ramp in HBM shipments. Gross margin expanded sharply, underscoring improved pricing power and mix. More importantly, management guided for another strong quarter ahead, with Q1’26 revenue projected around $12.5B and gross margins near 51.5%.

HBM: The Growth Engine

The standout driver is Micron’s HBM ramp. With HBM3E shipping today and HBM4 targeted for mid-2026, Micron has secured design wins with major hyperscalers. HBM demand is in structural shortage, and Micron is capitalizing by locking in favorable pricing agreements. Combined with robust DRAM trends, this positions the company for sustained growth even as NAND remains more volatile.

Financial Strength and Valuation

Free cash flow jumped meaningfully this quarter, allowing Micron flexibility for both shareholder returns and capacity investment. Despite the stock’s rally, Micron trades at only ~12–14x forward earnings, still attractive relative to AI peers given its growth trajectory. For investors, this means Micron is a way to gain direct exposure to AI infrastructure at a reasonable valuation.

Technical Analysis

• After consolidating below the 200 resistance for about 2 weeks, prices broke above the 200.00 resistance forming a new higher support

• Momentum looks to continue as long as this new support is able to hold

• 3 Moving averages are still slopping upward, with next target drawn up to 240.00 first

• 2 1GT Bullish signals still in play since early September

Final Thoughts

Micron is quietly becoming one of the most important suppliers in the AI revolution. With record earnings, a clear HBM roadmap, and stronger financial discipline than in past cycles, the stock offers both growth and relative value. For investors looking beyond the usual GPU names, Micron deserves a spot on the AI infrastructure watchlist.

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Sources:
1. Micron raises forecasts as AI boosts memory chip demand. Available at:: https://www.reuters.com/business/micron-raises-forecasts-ai-boosts-memory-chip-demand-2025-08-11
2. Micron takes the HBM lead with fastest ever HBM4 memory with a 2.8TB/s bandwidth - putting it ahead of Samsung and SK Hynix . Available at: https://www.techradar.com/pro/micron-takes-the-hbm-lead-with-fastest-ever-hbm4-memory-with-a-2-8tb-s-bandwidth-putting-it-ahead-of-samsung-and-sk-hynix

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