Shares of Micron Technology (MU 4.81%) have soared nearly 191% so far in 2025. Following such an exceptional performance, some investors may wonder if they missed the opportunity. But Micron's growth trajectory is now being driven primarily by solid artificial intelligence (AI)-powered memory demand in data centers.
Unlike the cyclical memory demand of the past, this AI-driven demand is tied directly to the multiyear global expansion of AI infrastructure. With McKinsey estimating $6.7 trillion global spending in data centers by 2030, Micron stands to be a significant beneficiary of the AI memory chip supercycle.
Image source: Getty Images.
AI memory chip supercycle
The data center segment accounted for 56% of Micron's total $37.4 billion in revenue in fiscal 2025 (ending Aug. 28). The combined revenue from high-bandwidth memory (HBM), high-capacity Dual In-Line Memory Modules (DIMMs), and Low-Power Double Data Rate (LPDDR5) DRAM for servers used in data centers were $10 billion in fiscal 2025, nearly five times higher than in fiscal 2024. HBM sales reached $2 billion in the fourth quarter, implying an annualized run rate of $8 billion.
NASDAQ: MU
Key Data Points
Increasing memory demand from data centers and other end markets, along with rising server usage, has led to a demand-supply mismatch in the DRAM market. This has significantly increased Micron's pricing power, enabling it to finalize pricing agreements for a major chunk of its HBM3E supply for calendar 2026. This will ensure robust gross margins and limited volatility, even if the memory environment changes in the next year.
Management is guiding Micron's revenue to be in the range of $12.2 billion to $12.8 billion, and non-GAAP EPS in the range of $3.60 to $3.90 in the first quarter of fiscal 2026. With DRAM inventories below the target level and Micron demonstrating its technology leadership with HBM4, the company is well-positioned to achieve its target in the coming quarter.
