Micron’s shares have climbed sharply as the artificial intelligence revolution has driven unprecedented demand for high-bandwidth memory (HBM) chips. Over the past three months, the stock nearly doubled, reflecting a broader memory shortage that has bid up prices across the industry. Only three companies globally—Micron, Samsung and SK Hynix—produce advanced HBM, and Micron has already sold out its entire 2026 HBM allocation. This limited supply has translated into record revenue growth and significant pricing power for Micron, helping it outperform peers and capitalize on the AI data center build-out.

In its December earnings report, Micron guided to fiscal Q2 revenue of approximately $18.7 billion, outpacing the consensus forecast of $14.3 billion. The company also projected earnings per share of $8.42, nearly double the $4.71 that analysts had expected. Management attributed the upside to robust HBM pricing and sustained data-center orders, and noted that customer commitments for 2026 supply are already in place. These figures underscore Wall Street’s underestimation of Micron’s ability to expand margins during the current memory cycle.

Micron now anticipates the total addressable market for high-bandwidth memory will hit $100 billion by 2028, two years earlier than previously forecast. The company expects a compound annual growth rate of 40% through 2028, driven by AI workloads in data centers, automotive systems and edge computing. To meet this surge, Micron has earmarked over $20 billion in capital spending for the current fiscal year and plans major expansions at its Virginia, Idaho and New York fabrication sites.

Despite a 165% rally since last September, Micron remains valued like a cyclical memory stock, trading at a forward price-to-earnings ratio of roughly 12. This compares to tech-sector averages in the mid-20s and suggests room for further upside if supply shortages persist. Institutional investors have taken notice; Avidian Wealth Enterprises recently disclosed a new position of 2,165 shares valued at around $362,000, while more than 80% of Micron’s shares are held by hedge funds and other large institutions. Analysts’ consensus remains a buy, with an average target price north of current levels.