Micron Technology experienced a significant rise in its shares during early Thursday trading, positioning the stock for its highest level in two months. This surge followed the chipmaker’s release of stronger-than-expected fourth-quarter earnings and a robust outlook that bolstered the broader AI investment theme.
Micron Technology, identified under the ticker symbol MU, is the first of the major chipmakers to report quarterly earnings each season and is considered a bellwether for the semiconductor sector. Its products are utilized globally in computers, smartphones, and data centers. The company is also establishing a crucial presence in the market for high bandwidth memory (HBM) chips, which enhance performance and reduce power consumption in AI systems. Notably, these HBM chips, including the new HBM3E iteration, are now integrated into Nvidia’s H200 processors and the newly developed Blackwell systems. This positioning affirms Micron as one of the few global enterprises capable of competing in this rapidly growing market.
Micron has projected “multiple billions of dollars of revenue” from the sale of HBM chips in the upcoming fiscal year. Although specific revenue figures for its HBM chips were not disclosed, the company reiterated that it achieved “several hundred million dollars” in sales during its 2024 financial year, which concluded on August 29, and anticipates “multiple billions of dollars of revenue of HBM in fiscal year ’25.”
Regarding the market outlook, Micron foresees the total addressable market for HBM chips—a segment also involving South Korea-based SK Hynix and Samsung Electronics—expanding from $4 billion in 2023 to approximately $25 billion by 2025. This favorable outlook helped mitigate the impact of stalled PC and smartphone chip sales, which have been affected by a broader market surplus and a reduction in consumer electronics spending.
Micron reported fourth-quarter revenues of $7.75 billion, nearly doubling from the same period the previous year and slightly exceeding Street forecasts. The reported bottom line was $1.18 per share. Looking ahead to the current quarter, Micron projects revenues around $8.7 billion, with a $200 million margin of error, and earnings of approximately $1.74 per share. The profit margins are expected to improve by 300 basis points to 39.5%, partly due to an increased mix of higher-priced HBM sales.
CEO Sanjay Mehrotra expressed optimism during a conference call, noting that Micron is entering fiscal 2025 with the strongest competitive positioning in its history. Mehrotra highlighted expectations for a broadening of demand drivers, complementing strong demand in the data center, and anticipated a substantial revenue record and significantly improved profitability for fiscal 2025.
Several analysts have responded positively to Micron’s performance and outlook. BofA analyst Vivek Arya increased his price target by $15 to $125 per share, impressed by the company’s performance despite macroeconomic headwinds. TD Cowen analyst Karl Ackerman raised his price target by $20 to $135 per share, citing continued momentum driven by factors like B100 qualification, HBM ramp, and improved supply chain visibility in 2025. CFRA analyst Angelo Zino maintained his $140 price target, noting the potential for increased HBM growth as Nvidia’s offerings ramp up. Morgan Stanley analyst Joseph Moore raised his target to $114 per share, while Goldman Sachs analyst Toshiya Hari reiterated a $145 price target. Conversely, Mizuho analyst Vijay Rakesh lowered his target to $135 from $145 per share, and Susquehanna reduced it to $165 per share from $175.
Micron has indicated that its capital expenditure for 2025 will be significantly higher than in 2024, when it totaled $8.1 billion, projecting it to be “around the mid-30s percentage range of revenue” based on current expectations. This forecast translates to approximately $13.5 billion in capex, marking a near 70% increase from fiscal 2024 levels.
As of the latest update, Micron shares were marked 16.9% higher in premarket trading, indicating an opening bell price of $112.01 each.
