Micron Technology, Inc. MU, a memory and storage solutions provider, has seen its stock surge by over 42% year-to-date. This performance significantly outpaces the Nasdaq Composite’s and S&P 500’s almost 6% returns.
The strong demand for its memory chips, particularly High-Bandwidth Memory (HBM), specifically HBM3E, has been a key driver. HBM3E is crucial for AI accelerators like Graphics Processing Units (GPUs) or Application-Specific Integrated Circuits (ASICs). Micron’s HBM3E is a component in Nvidia Corp.’s NVDA Blackwell and Rubin GPU lines and is also being supplied to other customers for use in GPUs and ASICs.
Favorable Market And Policy Environment
The recovery in the semiconductor market, coupled with efforts by the U.S. government to bolster the domestic semiconductor industry, has boosted chip companies’ valuations. Micron has benefited from a recovery in memory chip pricing and reported increased sales in both data centers and consumer markets.
Also Read: AMD and Micron Are Top Analyst Picks for AI and Next-Gen Tech Growth
Macroeconomic Tailwinds: “Big Beautiful Bill” And CHIPS Act
Recent macro events have further added value to the industry. On July 4, 2025, President Donald Trump announced the “Big Beautiful Bill,” which proposes to increase the semiconductor investment tax credit from 25% to 30% through 2026.
This offers chipmakers an incentive to expand domestic manufacturing facilities. Furthermore, Trump established the United States Investment Accelerator within the Commerce Department via executive order, taking direct control of the CHIPS Act program and shifting its oversight from previous frameworks.
Despite his past criticism of the $39 billion in grants and up to $75 billion in loans under the CHIPS and Science Act, Trump is now promoting pro-chip policies through this new bill, which has passed the Senate and awaits House approval.
Micron’s Strategic U.S. Expansion
Micron has been pursuing its growth ambitions through substantial investments in the U.S. On June 12, Micron and the Trump Administration unveiled plans to invest approximately $200 billion in U.S. expansion.
This plan includes the development of two fabs in Idaho, up to four in New York, and the modernization of its existing Virginia plant. An additional $50 billion is earmarked for domestic research and development (R&D) to support Micron’s leadership in memory technology.
Micron is committed to an extra $30 billion beyond its prior announcements, with new efforts specifically targeting HBM packaging and the construction of a second Dynamic Random Access Memory (DRAM) fab in Boise, Idaho.
This aims to boost production and reduce time to market. The company projects the creation of up to 90,000 direct and indirect jobs and intends to produce 40% of its DRAM in the U.S., co-locating Idaho fabs with R&D operations for operational scale and speed.
Micron is eligible for up to $6.4 billion in CHIPS Act direct funding and Advanced Manufacturing and Innovation Competitiveness (AMIC). It has already finalized a $275 million grant to modernize its Virginia facility and onshore advanced DRAM nodes, crucial for critical sectors such as automotive, defense, and healthcare.
Financial Performance
On June 25, Micron reported third-quarter revenue of $9.3 billion, up roughly 16% on a year-over-year basis, topping the consensus estimate of $8.87 billion. Micron expects fourth-quarter revenue of $10.7 billion, plus or minus $300 million, versus estimates of $9.88 billion. The company said it remains on track to deliver record revenue with solid profitability and free cash flow in fiscal 2025.
Potential Risks And Challenges
However, Micron faces certain risks. Following the quarterly results, Micron CEO Sanjay Mehrotra cautioned that the recent AI-driven demand might not be entirely sustainable, citing potential short-term distortions stemming from global trade tensions.
He warned investors about tariff-related order pull-ins, suggesting that some customers may have accelerated purchases to circumvent potential trade disruptions. While data center growth was strong in the third quarter, Mehrotra advised caution, indicating that the surge could be partly front-loaded and not fully indicative of steady long-term demand.
Bank of America’s Vivek Arya maintained a cautious stance on Micron due to ongoing weak demand in the PC and smartphone sectors, which continues to exert pressure on memory chip pricing despite the company’s earnings and outlook.
On July 8, rival Samsung SSNLF reported a 56% drop in second-quarter operating profit to 4.6 trillion won (approximately $3.3 billion), falling short of expectations.
Samsung attributed this decline to inventory value adjustments and delays in HBM chip shipments to Nvidia, noting that U.S. export restrictions on AI chips to China heavily impacted its semiconductor business. This marked Samsung’s weakest profit in six quarters, a decline from 10.4 trillion won a year earlier.
Analyst Outlook
Twenty-six analysts have set a consensus price target of $149.77 for Micron. Based on the latest ratings from Baird, Susquehanna, and Stifel, the stock carries an average target of $168.33, suggesting a potential upside of 38.49%.
Price Action: MU stock is trading higher by 1.34% to $121.53 premarket at last check Tuesday.
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