Micron Technology, Inc. (MU): A Bull Case Theory
A robotic arm holding a semiconductor chip, emphasizing the precision and quality of the company's production equipment.
Micron Technology, a leading U.S.-based memory semiconductor producer, remains a controversial investment. As one of three global DRAM and NAND giants, it benefits from scale, process leadership, and high barriers to entry but operates in a deeply cyclical, commodity-like market, deterring many long-term investors.
DRAM, its largest segment (≈70% of revenue), has gained market share to ~25% amid early DDR5/LPDDR5X adoption, node leadership (1αnm/1βnm), and a pivot to AI, automotive, and industrial applications. NAND (≈30% of revenue) remains more challenged, with Micron holding ~11–12% share, behind Samsung and SK Hynix.
Its fastest-growing business, high-bandwidth memory (HBM), is critical for AI workloads; Micron's HBM3E/4 products lead in power and capacity, with 2025 output sold out and share expected to reach 20–25% by year-end. Integrated manufacturing, U.S.-heavy production, and diversification limit geopolitical risk.
Financially, Micron is rebounding sharply: Q3 FY25 revenue grew 37% YoY to $9.3B, gross margin hit 39%, EPS surged >200% YoY, and free cash flow reached $1.9B despite $2.7B in capex. Management guides Q4 revenue up 15% sequentially to $10.7B and EPS of $2.50, with DRAM and HBM driving mid-teens bit growth.
Structural AI, data center, and automotive demand should sustain a low-double-digit CAGR through cycles. Valuation remains attractive at ~10x FY26 earnings, with a PEG of ~0.4x.For investors with a 5–10 year horizon and a tolerance for 30–50% drawdowns, Micron offers exposure to secular AI-driven growth. Shares near $125 could deliver mid-teens annualized returns, with upside if current execution persists.
Previously we covered a on Micron Technology, Inc. by Oliver | MMMT Wealth in April 2025, which highlighted its technological edge, secular AI-driven memory demand, and undervaluation as key drivers. The company's stock price has appreciated by approximately 69% since our coverage. This is because AI and data center tailwinds accelerated. The thesis still stands as structural demand persists. Daan | InvestInsights shares a similar but emphasizes on Micron's HBM leadership and financial rebound.
Micron Technology, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 96 hedge fund portfolios held MU at the end of the first quarter which was 94 in the previous quarter. While we acknowledge the potential of MU as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
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