Key Points
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Micron Technology (NASDAQ: MU) is experiencing a surge in demand for its high-bandwidth memory (HBM) driven by artificial intelligence (AI) applications.
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The company’s earnings could potentially quadruple in the next two years due to strong demand and supply constraints, according to William Blair analyst Sebastien Naji.
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Micron projects that the HBM market will grow from approximately $35 billion last year to around $100 billion by 2028, with a compound annual growth rate of about 40%.
Demand for Micron’s memory solutions is intensifying as AI applications expand within data centers and edge devices like smartphones and smart glasses. CEO Sanjay Mehrotra highlighted the critical role of HBM, stating that “memory is now essential to AI cognitive functions,” amplifying the requirement for HBM as developers increase context windows for large language models.
Despite the favorable market dynamics, Micron’s stock has a consensus price target that is approximately 12% lower than its current trading value, according to a survey of 43 analysts by S&P Global. Nonetheless, the company remains well-positioned for growth in a tight supply environment, potentially outpacing competitors like Samsung.
