Micron (MU +0.17%) has been one of the tech sector's biggest winners recently. While the company's performance has historically been tied to cyclical shifts in the memory chip market, demand connected to artificial intelligence (AI) has pushed the business into a powerful new growth phase that seems to have legs. As of this writing, the stock has surged more than 245% over the last year of trading.
NASDAQ: MU
Key Data Points
Micron's AI memory wins are supercharging performance
Micron's high-bandwidth-memory (HBM) chips have become go-to components for Nvidia, Advanced Micro Devices, and other leading companies that design processors for AI data centers. Thanks to a huge valuation surge over the last year, Micron stock is now up roughly 2,490% over the last decade. That means you would now be holding stock worth roughly $2,600 if you bought $100 worth of shares 10 years ago and held on to your position.
Image source: Getty Images.
In addition to creating surging new streams of high-margin revenue, Micron's wins in the HBM space have had positive knock-on effects for the company's consumer memory chip business. Demand for HBM solutions is so high that Micron is having to prioritize manufacturing initiatives, and it's understandably focusing on high-margin AI chips for the enterprise market.
The good news for Micron investors is that heightened demand in the memory chip market has also translated to increased pricing power in the consumer market. The chip specialist's business is firing on all cylinders right now, and the rally for its stock reflects hopes that AI demand will turn into a secular tailwind.
