Though Micron Technology (MU 1.04%) stock has witnessed big swings so far in 2025, shares of the memory specialist are still up 15% this year, as of this writing, and it looks like the stock is set to fly higher following the release of its fiscal 2025 second-quarter results.
Micron released its latest quarterly report (for the three months ended Feb. 27) on March 20. The company recorded a massive increase in its top and bottom lines last quarter and crushed Wall Street's expectations handsomely. What's more, Micron's guidance for the current quarter also exceeded consensus estimates, which was not surprising, as the company is witnessing remarkably strong demand for its high-bandwidth memory (HBM) that's deployed in artificial intelligence (AI) data centers.
NASDAQ: MU
Key Data Points
Let's take a closer look at Micron's latest quarterly report and see why it may be a good idea to buy this semiconductor stock right away.
AI-fueled demand has helped Micron Technology step on the gas
Micron's fiscal Q2 revenue shot up an impressive 38% year over year, while its non-GAAP (generally accepted accounting principles) earnings increased at a much faster pace and jumped 3.7x from the year-ago period to $1.56 per share. Micron's outstanding growth was powered by record revenue from dynamic random access memory (DRAM) chips used in data centers.
Sales of Micron's HBM chips that are used by the likes of Nvidia in its data center AI graphics processing units (GPUs) shot up 50% on a sequential basis, generating more than $1 billion in quarterly revenue for the company. HBM chips alone are moving the needle significantly for Micron right now, considering that the company's total quarterly revenue landed at just over $8 billion.
Micron's HBM business is likely to remain a key growth driver in the future as well, as AI chipmakers have been packing in bigger memory into their data center GPUs. For instance, Advanced Micro Devices is packing 288 gigabytes (GB) of HBM into its MI325X AI GPUs, which the company started shipping last quarter. That's higher than the 192 GB of HBM that the company's previous MI300X chip was sporting.
Similarly, Nvidia has also bumped up the HBM capacity in its latest Blackwell processors to 192 GB from 141 GB in the previous-generation Hopper H200 processor.
Given that these chips are in solid demand, it is easy to see why Micron has sold out its entire HBM capacity for 2025. Even better, Micron expects strong HBM demand to continue in 2026.
As a result, the company is ramping up the production capacity of HBM chips in its existing facilities and recently broke ground on a new HBM facility in Singapore. It may have to add additional HBM production lines in the future, as Micron started "volume shipments to our third large HBM3E customer and anticipate additional customers over time."
Micron has increased its total addressable market (TAM) estimate for HBM in 2025 to $35 billion from its December 2024 estimate of $30 billion. Bloomberg Intelligence estimates that the global HBM market could generate a whopping $130 billion in annual revenue in 2033. So there is a good chance Micron's HBM business will remain a critical growth driver for the company in the long run.
The guidance and valuation make the stock worth buying right away
These catalysts tell us why Micron's outlook for the current quarter is solid. The company is expecting its revenue to jump by 29% in the current quarter from the year-ago period, while its earnings forecast of $1.57 per share would translate into a massive jump of 153% from last year.
However, the possibility of Micron exceeding these estimates cannot be ruled out if it manages to bring more capacity online to meet the healthy demand for HBM. Additionally, the rapid growth in Micron's earnings makes this AI stock a no-brainer right now, considering its attractive valuation.
Micron is trading at 29 times trailing earnings, while its forward earnings multiple of 14 points toward a big bottom-line jump. The tech-laden Nasdaq-100 index, for comparison, has trailing earnings multiple of 22 and forward earnings multiple of 13.
All this makes Micron Technology a top stock to buy right now, as it has the potential to jump higher thanks to the eye-popping growth that it is delivering and its solid prospects in the HBM market.
