In This Article:
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The explosive increase in demand for high bandwidth memory chips has been a major catalyst for Micron.
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The company is well positioned to capture a significant share of the $130 billion high bandwidth memory market.
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Micron has transformed itself from a cyclical memory producer into an AI infrastructure player.
Semiconductor giant Nvidia continues to be a Wall Street favorite -- and for all the right reasons. The company's transition from a prominent GPU company to a full-stack artificial intelligence (AI) infrastructure provider has been genuinely exceptional. Its full-stack solution includes its Hopper and Blackwell architecture chips, AI-optimized networking interconnections, and a robust software ecosystem. As cloud services providers and enterprises invest heavily in building and expanding their AI infrastructure, Nvidia is well positioned to benefit.
As of July 10, Nvidia's shares were up 22.2% in 2025. However, a few AI-powered stocks that are less famous have significantly outperformed it year to date. Among them is Micron Technology (NASDAQ: MU), which is up 46.2% in 2025. While many investors appreciate this business, few seem to understand all the growth catalysts that will drive its share price performance.
AI is fundamentally transforming Micron's business model and its growth trajectory. In its fiscal 2025 third quarter (which ended May 29), the company's data center revenues more than doubled year over year and reached record levels, as high bandwidth memory (HBM) and storage are becoming increasingly critical for supporting complex AI workloads and applications. Micron's HBM revenues were up by around 50% sequentially, and the business has reached an annual run rate of more than $6 billion.
Bloomberg Intelligence has estimated that from 2023 to 2033, the HBM chip market will grow at a compound annual rate of 42%, from $4 billion to $130 billion. That exceptionally rapid growth outlook is based on the fact that increasingly complex AI models require higher amounts of low-latency memory, and the expectation that many enterprises will transition from high-performance computing to advanced AI applications.
To capitalize on this opportunity, Micron has been actively shifting more of its production capacity to advanced HBM architectures that offer higher memory capacity and bandwidth. With Micron being one of the only three global HBM providers (SK Hynix and Samsung are the other two), the company expects its HBM market share to be equal to its DRAM share by the second half of 2025.