Micron Technology Sees Surge Following Exciting AI Announcements
Shares of Micron (NASDAQ: MU) experienced a notable uptick this week, thanks to the overall enthusiasm surrounding the chip sector and artificial intelligence (AI) sparked by the CES event. Additionally, the company received attention from AI powerhouse Nvidia (NASDAQ: NVDA), which incorporates Micron components in its latest offerings.
As reported by S&P Global Market Intelligence, Micron’s stock rose 10.6% by the close of trading on Wednesday. The market is closed today to honor President Jimmy Carter.
Nvidia’s Influence Boosts Micron Stock
The key news propelling Micron’s stock higher was Nvidia’s announcement that it will use Micron’s high-bandwidth memory (HBM) in its upcoming GeForce RTX 50 Blackwell GPUs, which are integral to Nvidia’s advanced AI platform. This collaboration reinforces their growing partnership, with Nvidia now estimated to be Micron’s largest customer, accounting for 13% of its revenue.
This partnership highlights Micron’s successful positioning in the booming AI market. After facing a decline due to disappointing guidance in last month’s fiscal first-quarter earnings, the new developments suggest a resurgence driven by strong AI demand.
Micron’s data center revenue surged, increasing 40% sequentially and an impressive 400% year over year. Overall revenue climbed 84%, reaching $8.71 billion.
What Lies Ahead for Micron?
Micron’s stock valuation is currently appealing, trading at a forward price-to-earnings (P/E) ratio of 14, making it attractive compared to other companies in the chip sector. While the memory market is known for its cyclical nature, recent trends indicate that it may be in a strong growth phase, suggesting potential further gains for Micron.
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Jeremy Bowman has positions in Micron Technology and Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
