Micron Technology: A Stock Growing Fast with a Valuation of Just 22 Times Earnings

Micron Technology's earnings are expected to significantly multiply, driven by the growth opportunity in the memory chip market, fueled by AI applications. The stock can be bought at an attractive valuation of 22 times earnings. As a leader in AI hardware, Micron sells high-bandwidth memory chips to top AI chipmakers, with a goal of cornering a quarter of the HBM market by year-end. The HBM market is projected to almost double in 2025 and reach $100 billion by 2030.

Micron Technology (MU) is poised to significantly multiply its earnings, driven by the burgeoning growth in the memory chip market fueled by artificial intelligence (AI) applications. The stock currently trades at an attractive valuation of 22 times earnings, making it an enticing opportunity for investors.

As a leading player in AI hardware, Micron sells high-bandwidth memory (HBM) chips to top AI chipmakers. The company aims to capture a quarter of the HBM market by the end of 2025. The HBM market is projected to almost double in 2025, reaching $100 billion by 2030. This growth trajectory presents a substantial opportunity for Micron.

Micron's strategic position in the HBM market is bolstered by its advanced technology. The company's 12-high-stacked HBM3E offers 50% higher capacity than rival designs, while consuming 20% less power. This is crucial for AI accelerators like NVIDIA's Hopper GPUs and AMD's Instinct chips, which demand both speed and efficiency.

Moreover, Micron's 1-gamma DRAM, the first to leverage extreme ultraviolet (EUV) lithography, represents another leap forward. This technology improves power efficiency by 20%, performance by 15%, and bit density by over 30%. The result is products like SOCAMM modules for NVIDIA's GB300 GPU, which compress memory into smaller form factors while slashing power consumption by two-thirds.

The financials speak volumes. HBM's gross margins are projected to hit 42% by Q4 2025, far above Micron's overall 39% margin. And with HBM4 promising a 60% bandwidth boost over HBM3E, scheduled for 2026, Micron is not just keeping pace with AI's memory demands but setting the pace.

Micron's transformation is far from complete. By 2033, its HBM total addressable market (TAM) will expand to $130 billion, and its 1-gamma DRAM will underpin the next wave of AI hardware. Today's valuation offers a rare entry point: a company with a 39% gross margin, fortress liquidity, and a product mix increasingly tilted toward AI's insatiable hunger for memory.

Investors seeking exposure to the AI infrastructure boom would do well to look beyond the sector's flashy chip designers and toward the unsung enablers like Micron. This is a stock primed to re-rate as the world's data centers and supercomputers increasingly depend on its technology. The question is no longer whether Micron can escape its cyclical past—it already has. The question now is, will investors recognize it before the market does?

References:
[1] https://www.ainvest.com/news/micron-technology-memory-cyclicality-ai-infrastructure-dominance-2507/
[2] https://www.fool.com/investing/2025/07/17/this-artificial-intelligence-stock-trades-at-just/