Micron Technology (NASDAQ: MU) Stock Surges Amid Strong Demand for AI Hardware
Nvidia-Related News Boosts Micron Stock
As the trading day progresses, shares of Micron Technology (NASDAQ: MU) are rising by 11.7% as of 1 p.m. EST. This significant gain comes amidst a backdrop of moderate gains for both the S&P 500 index and the Nasdaq Composite index, which are up 1% and 1.5%, respectively.
The catalyst behind Micron’s stock surge lies in related news surrounding Nvidia (NASDAQ: NVDA), a leading player in artificial intelligence (AI) technology. Investors have received a new indicator that demand for Nvidia’s hardware remains strong, sparking excitement about the company’s future prospects.
Nvidia CEO’s Keynote Speech and New Hardware Features
This evening, Nvidia CEO Jensen Huang is set to deliver a keynote speech at the CES conference, where he may discuss new hardware featuring Micron’s technologies. The possibility of this announcement has contributed to the surge in Micron’s stock price.
Moreover, Foxconn Technology (TWSE: 2354.TW) reported record revenue for its fourth-quarter results earlier today. As one of Nvidia’s largest customers, Foxconn’s strong sales of AI servers are a positive indicator for the demand of Nvidia’s hardware. Micron’s technology is already integrated into Nvidia’s Blackwell B200 and GB200 platforms.
GB300: A New Processor with Enhanced Performance
The upcoming release of Nvidia’s GB300 processor is highly anticipated to deliver a significant performance leap over its predecessor, the GB200 line. Given that Micron’s tech is currently featured in the GB200 platform, it’s reasonable to assume that the company will also secure design wins for the GB300.
What’s Next for Micron?
Micron’s stock has been volatile lately, with the company reporting mixed results. On December 18, Micron published its fiscal 2025 Q1 results, which exceeded expectations in terms of sales and earnings. However, management’s forward guidance was met with disappointment from investors.
For the second quarter, Micron guided revenue to approximately $7.9 billion and earnings per share to $1.43. In contrast, analysts had predicted revenue of $8.98 billion and earnings per share of $1.91. Management attributed the soft outlook to slower growth in certain areas of the consumer market and inventory adjustments.
Despite today’s surge, Micron stock still trades at a 35% discount from its high last year. The memory chip market is known for its cyclicality, leading investors to be divided on the company’s performance outlook. However, Micron appears well-positioned for long-term growth as it seeks to capitalize on the expanding total addressable market in the HBM category.
Micron’s Position in the HBM Category
The HBM category is expected to expand from $16 billion in 2024 to over $100 billion by 2030. Micron is well-positioned to lead this space, making it an attractive investment opportunity for long-term investors.
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The Motley Fool’s Disclosure Policy
Keith Noonan has positions in Micron Technology. The Motley Fool recommends Nvidia and has a disclosure policy.
