Micron Technology has emerged as a critical supplier in the artificial intelligence infrastructure market, with hyperscale data centers now accounting for over 45% of its quarterly revenue. In the fiscal first quarter ended December, Micron’s sales jumped 57% year-over-year to $13.6 billion, driven almost entirely by high-bandwidth memory (HBM) and enterprise SSD products sold into AI training and inference workloads. Management reports that HBM orders are fully committed through 2026, and capital expenditure budgets at cloud providers have shifted so that memory and storage now represent 35% of overall AI hardware spend, up from 20% just 12 months ago.

Micron’s gross margin improved to 57% in the most recent quarter, up from 45% a year earlier, as tight industry supply allowed the company to increase selling prices by an average of 25% on its leading-edge HBM4 modules. Analysts project the HBM total addressable market to grow at a 40% compound annual growth rate to reach $100 billion by 2028, and Micron’s roadmap suggests it will take at least a 30% share of that market. With adjusted free cash flow of $3.9 billion generated in the latest quarter, the company has earmarked over $1 billion for share repurchases and $600 million for dividend distributions so far in this fiscal year.

Despite delivering approximately $10 in earnings per share last year and consensus forecasts calling for $33 of EPS this fiscal year, Micron trades at just a 12-times forward price-to-earnings ratio. By comparison, AI-adjacent semiconductor peers command forward multiples above 24. If Micron’s valuation multiple rises to 24, consistent with leaders in the chip value chain, its share count reduction from ongoing buybacks would imply potential upside of over 100% by year-end. Institutional ownership remains at 62%, suggesting room for renewed inflows as analysts update their targets to reflect accelerating AI memory demand.