Micron (NASDAQ: MU) is a semiconductor company that specializes in memory and storage products. It is in the news today after posting weak guidance for its upcoming quarter, tumbling more than 15%. Nevertheless, data servers and high-bandwidth memory (HBM) chips are set to fuel huge earnings growth over the next few years, connected to the AI craze. Memory will be used in both training and inference related to artificial intelligence models.
“Our high-bandwidth memory (HBM) shipments were ahead of plan, and we achieved more than a sequential doubling of HBM revenue.”
“In 2028, we expect HBM total addressable market (TAM) to grow four times from the $16 billion level in 2024 and to exceed $100 billion by 2030.”
“…industry’s most advanced DRAM and NAND nodes”
DRAM: dynamic random access memory
$6.4 billion, representing 73% of total revenue in FQ1-25
NAND: flash memory
$2.2 billion, representing 26% of total revenue in FQ1-25
• Compute and Networking Business Unit revenue was up 46% sequentially to $4.4 billion and now represents over half of our total revenue. CNBU revenue reached a new quarterly record, driven by cloud server DRAM demand, as well as HBM revenues, which more than doubled sequentially in the quarter.
• Mobile Business Unit revenue was $1.5 billion, down 19% sequentially. As our mobile customers focused on improving their inventory health, we shifted supply to meet data center demand.
• Embedded Business Unit revenue was $1.1 billion, down 10% sequentially. Auto, industrial and consumer customers continue to manage their inventories lower.
• Revenue for the Storage Business Unit was $1.7 billion, up 3% sequentially. SBU revenue reached a new quarterly record, driven by record revenue in the data center SSD segment.
Chief Executive Sanjay Mehrotra: “While consumer-oriented markets are weaker in the near term, we anticipate a return to growth in the second half of our fiscal year. We continue to gain share in the highest margin and strategically important parts of the market and are exceptionally well positioned to leverage AI-driven growth to create substantial value for all stakeholders.”
TTM P/E ratio: 24x
FWD P/E ratio: 11x
52-week range: 79.15 – 157.54
Current price: 86.29
Total cash: $8b
Total debt: $14b
Disclosure:
*I own and recommend shares of Micron*
Devlin Demontigny 