Why the Selloff in Micron Technology Stock Never Made Sense

• Micron Technology (MU) controls 23% of the planetary DRAM marketplace and 12% of NAND flash.

• UBS raised planetary HBM request forecasts to 28 cardinal gigabits by 2026.

• Micron trades astatine a guardant P/E of 10 versus the semiconductor manufacture mean of 25x.

• If you’re reasoning astir retiring oregon cognize idiosyncratic who is, determination are 3 speedy questions causing galore Americans to recognize they tin discontinue earlier than expected. instrumentality 5 minutes to larn much here

Micron Technology (NASDAQ:MU) shares soared to an all-time precocious of $260 earlier this month, riding the question of AI-driven optimism successful the semiconductor sector. But similar astir spot and tech stocks, the representation spot shaper has trended little since, caught successful broader marketplace jitters implicit AI hype fears.

Last week, the selloff intensified, with Micron plunging 10% successful a azygous league -- triggered partially by Nvidia's (NASDAQ:NVDA) net report, which, contempt beating estimates, highlighted rising costs and slower information halfway growth. Investors panicked, dumping representation plays similar Micron amid fears of overcapacity. Yet this driblet ne'er made sense. Here's why.

Micron stands retired acknowledgment to its commanding presumption successful DRAM and NAND flash memory. DRAM, indispensable for impermanent information retention successful servers, PCs, and smartphones, accounts for implicit fractional of Micron's revenue. The institution controls astir 23% of the planetary DRAM market, down lone Samsung and SK Hynix.

NAND flash, utilized for semipermanent retention successful solid-state drives (SSDs) and mobile devices, adds different 40% to sales, with Micron holding a 12% share. These segments payment from cyclical upturns, but AI is turning cycles into a structural boom.

What sets Micron isolated is its pivot to high-bandwidth representation (HBM), the ultra-fast DRAM variant captious for AI accelerators. HBM enables the monolithic information throughput needed for grooming ample connection models.

Micron began shipping HBM3E samples successful 2024 and is ramping accumulation this year, positioning it arsenic a cardinal supplier alongside SK Hynix. In the AI era, wherever Nvidia's GPUs and Advanced Micro Devices (NASDAQ:AMD) Instinct chips request terabytes of high-speed representation per rack, Micron's HBM expertise locks successful semipermanent growth.

Analysts task the HBM marketplace exploding from $4 cardinal successful 2023 to astir $100 cardinal by 2030, with Micron capturing a increasing portion done its precocious 1-gamma node tech, which boosts density and efficiency.

This dominance isn't conscionable antiaircraft -- it's a maturation engine. Micron's fiscal 4th fourth results showed 46% year-over-year gross maturation to $11.3 billion, driven by AI server request and beardown information halfway sales, which present relationship for 56% of full revenue. Even arsenic user markets similar PCs and smartphones retrieve slowly, AI hyperscalers similar Microsoft and Amazon are stockpiling Micron's representation for unreality infrastructure.