Tech titan Nvidia remains a highly favored choice on Wall Street, and for good reason. The company’s remarkable transformation from a leading Graphics Processing Unit (GPU) manufacturer into a comprehensive Artificial Intelligence (AI) infrastructure provider has been nothing short of impressive. This comprehensive offering encompasses their Hopper and Blackwell architecture chips, AI-enhanced network interconnections, and a robust software environment. With cloud service providers and businesses heavily investing in the development and expansion of their AI infrastructure, Nvidia finds itself in an advantageous position to reap the rewards.
By July 10th of 2025, Nvidia’s shares had increased by a substantial 22.2%. Yet, less well-known AI-focused stocks have exceeded this performance so far in the year. One such stock is Micron Technology (MU), which has experienced an impressive 46.2% growth in 2025. Although many investors value this company, there appears to be a lack of understanding among them regarding the multiple growth factors that will potentially boost its share price.
Where Micron’s growth will come from
In the midst of the bustling tech landscape, I find myself witnessing a remarkable transformation unfolding at Micron – a transformation driven by the very heart of innovation, Artificial Intelligence (AI). As I observe the company’s fiscal third quarter of 2025, which concluded on May 29, a striking surge in data center revenues catches my eye. These figures more than doubled year over year and reached unprecedented heights, marking a significant milestone for Micron.
The demand for high bandwidth memory (HBM) and storage solutions, crucial components for AI-heavy workloads and applications, has been on the rise. Consequently, Micron’s HBM revenues saw a substantial boost of approximately 50% compared to the previous quarter. As I stand by, I can attest that this business now boasts an annual run rate surpassing $6 billion. The growth trajectory of Micron is nothing short of inspiring as it navigates the dynamic world of AI-centric technology.
According to Bloomberg Intelligence predictions, the HBM chip market is projected to expand at an astounding yearly rate of 42% between 2023 and 2033, growing from $4 billion to a staggering $130 billion. This remarkable growth forecast is primarily due to the increasing demand for more intricate AI models that necessitate larger volumes of quick-response memory, as well as the anticipation that numerous businesses will migrate from conventional high-performance computing to sophisticated AI applications.
Micron is taking full advantage of this situation by moving a larger portion of its manufacturing resources towards advanced High-Bandwidth Memory (HBM) structures. These advanced architectures provide greater memory capacity and speed. As one of just three major HBM suppliers worldwide, alongside SK Hynix and Samsung, Micron aims to match its HBM market share with its DRAM share by mid-2025.
Micron is experiencing significant growth in both the market for data center and client solid state drives (SSDs). For the first time, it has risen to become the second most popular brand in data center SSDs. Furthermore, the company is poised to capitalize on the rising demand for memory in the PC sector. This surge can be attributed to the Windows 11 upgrade cycle and the expanding use of AI-equipped personal computers worldwide.
Technology leadership and manufacturing expansion
a 30% boost in bit density (more memory storage in the same physical area), a 20% energy savings, and up to 15% faster data movement compared to its preceding 1-beta node technology. It’s an exciting leap forward in the world of tech!
The business intends to allocate approximately $200 billion over the subsequent two decades for increasing its presence in the United States, with a focus on improving its manufacturing facilities to the tune of $150 billion and allocating $50 billion towards research and development.
The story of the numbers
In its third fiscal quarter, Micron Technology exceeded expectations by reporting an impressive revenue of $9.3 billion – a 37% increase compared to the same period last year. Moreover, their non-GAAP diluted earnings per share (EPS) soared to $1.91, marking a 200% rise. These figures surpassed both the company’s own projections and analysts’ average estimates on Wall Street.
As I observe, Micron projects its Q1 revenues to fall between $10.4 billion and $11 billion, with a predicted gross margin ranging from 41% to 43%.
In the current moment, it appears there’s a discrepancy between this stock’s impressive 46% year-to-date growth and its underlying fundamentals. The stock is priced at only 22.5 times its trailing earnings and 11.8 times projected earnings – a substantial reduction compared to the Nasdaq-100’s P/E ratio of 33.9. From my perspective, this could indicate an undervalued opportunity in the market.
As an avid investor, I can’t help but notice the bargain-basement P/E ratio on stocks like Micron, which some might attribute to investors’ cautious views on the memory industry’s cyclical nature and doubts about the longevity of AI-driven demand for memory. However, it seems that this discount might be overly generous.
Micron is not just another commodity memory producer; it’s positioning itself as a trailblazer in the realm of AI infrastructure. The company has already secured HBM contracts with major clients, offering unprecedented transparency and insight into pricing and demand – something unheard of in traditional memory deals.
Taking all this into account, I strongly believe that Micron could soon experience a significant uptick in valuation multiples, driving up its share price. It’s an exciting time to keep an eye on this transformative company!
Considering these catalysts, Micron seems like an appealing stock pick now.
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2025-07-17 01:13