Micron Technology’s stock has made a significant recovery over the past couple of months, gaining 37% as of this writing. This surge is largely attributed to the broader recovery in technology stocks. With its fiscal 2025 third-quarter results scheduled for release on June 25 after the market closes, investors are anticipating another potential boost for the semiconductor stock.
The Role of Artificial Intelligence in Micron’s Growth
A major catalyst behind Micron’s potential success is the growing demand for artificial intelligence (AI) technology. The company is poised to deliver impressive growth thanks to its involvement in AI-related products, particularly high-bandwidth memory (HBM) used in AI graphics processing units (GPUs) manufactured by industry leaders like Nvidia and AMD.
Micron’s fiscal Q3 guidance forecasts $8.8 billion in revenue at the midpoint of its guidance range, representing a significant increase from the $6.8 billion reported in the year-ago period. Adjusted earnings are expected to more than double on a year-over-year basis. However, investors should note that the booming demand for HBM could enable Micron to exceed its guidance.
Micron’s HBM and Its Impact on AI GPUs
Micron’s HBM has been selected for powering Nvidia’s GB200 and GB300 Blackwell systems. Nvidia’s recent data center revenue surged 73% year over year to $39 billion in the first quarter of fiscal 2026, with Blackwell AI GPUs accounting for 70% of the segment’s revenue. The company’s transition from the previous-generation Hopper platform to GPUs based on the latest Blackwell architecture is noteworthy, as Blackwell GPUs are equipped with larger HBM chips to enable higher bandwidth and data transmission.
For instance, Nvidia’s Hopper H200 GPU was equipped with 141 gigabytes (GB) of HBM, while the B200 Blackwell processor has been upgraded to 192 GB, and the more powerful B300 packs 288 GB of HBM3e memory. Micron management indicated on its March earnings conference call that it had started volume shipments of HBM3e memory to its third large customer, suggesting potential supply for Nvidia’s latest generation processors.
Favorable Pricing Scenario for Micron
The high demand for HBM has created a favorable pricing scenario for Micron. The company is reportedly planning to increase the price of its HBM chips by 11% this year. With its entire HBM capacity sold out for 2025 and negotiations underway for next year, Micron is likely to benefit from higher prices due to the scarcity of HBM.
This combination of higher HBM volumes and potential price increases explains why Micron’s top and bottom lines are expected to witness remarkable growth in its upcoming earnings report. Moreover, more chipmakers are integrating HBM into their AI accelerators, which could further accelerate growth in the industry.
Why Investors Should Consider Buying Micron Stock Before June 25
Despite the recent surge, Micron’s stock remains attractively valued at 23 times earnings. The forward earnings multiple of 9 is even more compelling, indicating significant earnings growth ahead. Consensus estimates project a 437% increase in Micron’s earnings this year, followed by another 57% jump in the next fiscal year. The stock’s median 12-month price target of $130 suggests a 27% potential upside from current levels.
Given the anticipated earnings growth and the positive outlook for Micron’s involvement in AI, investors may consider buying the stock before its June 25 report, which could further supercharge its recent rally.
