Micron price increases today due to strong data center sales and high HBM demand
The recent surge in Micron Technology (NASDAQ: MU) stock has captured the attention of investors, with the company’s focus on data center sales and growing demand for high-bandwidth memory (HBM) driving optimism in the market.
Last week, Micron stock rose by 4.7%, propelled by positive sentiment on Wall Street due to easing geopolitical tensions and expectations of interest rate cuts. The positive news of a ceasefire between Israel and Iran, along with Federal Reserve Chair Jerome Powell’s hints at potential rate cuts, contributed to a 1.1% increase in the S&P 500 and a 1.4% jump in the Nasdaq, where Micron outperformed both indices.
In the third quarter, Micron reported record revenue of $9.3 billion, marking a significant 37% year-over-year increase and the highest quarterly revenue ever achieved by the company. Operating income reached $2.17 billion, while net income experienced a massive 5.7x surge to $1.89 billion. The Compute and Networking unit, responsible for HBM memory used in AI chips, saw revenue of $5.07 billion, showing a notable 97% year-over-year growth. This quarter marked Micron’s fourth consecutive record in data center sales.
The demand for HBM continues to soar, with Micron playing a critical role as a supplier of HBM3E memory for key players like Nvidia and AMD. Looking ahead, Micron plans to launch HBM4 in 2026, expected to provide 60% more bandwidth and 20% less power consumption compared to its predecessor. The company anticipates the HBM market to reach $35 billion by 2025 and expand to $100 billion by 2030. CEO Sanjay Mehrotra highlighted a nearly 50% sequential increase in HBM sales during the third quarter, with capacity already allocated through 2026.
As Micron prepares for the fourth quarter, it forecasts revenue to hit $10.7 billion, with an EPS of $2.29, demonstrating a 38% and 190% increase, respectively, from a year ago. The company currently holds $10.8 billion in cash and plans to invest heavily in U.S. foundry expansion, allocating $14 billion for capital spending in FY2025. Moreover, Micron is actively engaging in sampling next-generation LPDDR5X and HBM4 memory utilizing EUV lithography, promising enhanced density, efficiency, and speed.
Despite a year-to-date gain of 42%, Micron stock remains undervalued with a 22.5 P/E ratio, significantly lower than Nvidia’s 50.9. With substantial HBM supply deals, a surge in data center demand, and promising long-term forecasts, Micron stock is increasingly being recognized as a leading player in AI hardware.
As Micron continues to innovate and evolve in the semiconductor industry, investors are closely watching the company’s strategic moves and anticipating even greater growth and success in the future.