Micron Technology is experiencing a remarkable turnaround, with its business undergoing a V-shaped recovery thanks to the accelerating artificial intelligence (AI) infrastructure development. After facing significant challenges in recent years, characterized by oversupplied markets for both DRAM (dynamic random access memory) and NAND (flash memory), Micron is now positioned to thrive in what many are calling a memory super-cycle.
Just a few years ago, Micron’s revenue plummeted nearly 50% during fiscal 2023, and its debt soared to over $13 billion. However, the landscape shifted dramatically, as the demand for memory solutions surged in light of burgeoning AI applications. Currently, Micron stands out as one of the leading beneficiaries of this trend.
As one of the top three DRAM manufacturers globally, alongside rivals Samsung and SK Hynix, Micron derives approximately 80% of its revenue from DRAM and 20% from NAND. The explosion in demand for high bandwidth memory (HBM)—a specialized form of DRAM critical for the efficient performance of GPUs and AI chips—has been a driving factor behind the company’s resurgence. The rapid development of large language models (LLMs) has accelerated the need for HBM, causing a significant uptick in prices.
Compounding this favorable scenario, the DRAM market currently faces a tight supply. Many manufacturers are focusing their capacities on producing higher-margin HBM, which requires far more resources than traditional DRAM. This shift in production has left the market short, leading to heightened prices across the board. The NAND sector is also struggling with supply issues due to increased demand for high-performance solid-state drives used in AI data centers.
As a direct result of these trends, Micron’s financial outlook has improved markedly. The company’s revenue is on the rise, gross margins are expanding, and profits are growing significantly. Notably, it has shifted to a net cash positive status on its balance sheet. Looking ahead, Micron’s HBM supply for 2026 is reportedly sold out, with expectations of a 40% annual demand growth rate through 2028. The company has also increased its capital expenditure budget from $18 billion to $20 billion to boost production capacity, indicating a proactive approach in meeting market needs.
Given these developments, some analysts suggest that Micron is well positioned to become a major player in the ongoing AI infrastructure expansion. However, potential investors should weigh advice carefully, as some analyst teams have identified other stocks that they believe may yield higher returns than Micron at this moment.
With a promising outlook fueled by a strong demand for memory solutions, Micron Technology is navigating its way through a transformative period, marking a striking recovery in the memory market.