Micron shares have climbed over 200% in calendar 2025, driven by accelerating adoption of high-bandwidth memory (HBM) for data centers and graphics applications. The company reported full-year 2025 revenues of $43.2 billion, up 57% year-over-year, while operating cash flow reached a record $15.7 billion. In the most recent quarter, Micron generated free cash flow of $3.8 billion, underscoring robust profitability after capital expenditures of $2.1 billion. These milestones reflect both stronger selling prices for DRAM and NAND products and disciplined cost management across manufacturing sites.

Management highlighted that the transition from AI model training to inferencing will substantially expand memory requirements, with inferencing projected to make up 80% of total AI spend over the next three years. Micron’s unveiling of a next-generation HBM4 module, featuring up to 64 GB per stack and bandwidth exceeding 2 TB/s, is expected to ship in volume by late 2026. For fiscal 2026, the company forecasts revenue growth of 30%–35% and anticipates a gross margin expansion to approximately 47%, driven by improved product mix and higher average selling prices.

Despite the sharp share appreciation, Micron trades at roughly 12 times fiscal 2026 consensus earnings estimates of $32.30 per share, a discount to peer group averages near 18x. However, investors should consider three critical risks: the cyclical nature of memory pricing that has historically led to margin swings of up to 15 percentage points, the potential for oversupply as Samsung and SK Hynix ramp HBM4 capacity in 2027, and the likelihood that average selling prices could stabilize or decline once industry utilization rates exceed 90%. Continuous monitoring of industry capacity additions will be essential to gauge the sustainability of current margin trends.