Micron Technology (MU, B, Halal) is a leading American manufacturer of computer memory and data storage solutions, including DRAM, NAND flash, and NOR memory, serving the AI, data center, automotive, and mobile industries. The company produces high-performance memory chips, SSDs, and modules. The company’s current market capitalization is $466.95B, with a stock price of $411.66 per share (Musaffa).

Business Analysis

The company's main revenue comes from DRAM, NAND, and Other (primarily NOR) products. DRAM (Dynamic Random Access Memory) is one of the company's largest revenue drivers, accounting for $28.578 billion (76.5%) of total revenue in fiscal year 2025. AI servers usually require huge amounts of high-performance memory to process large language models. This created a surge in demand for specialized DRAM. Likewise, an AI server requires up to 8x the DRAM content of a traditional server. DRAM average selling prices also increased nearly 20% in a single quarter (Q1 2026) (Tradingview). When it comes to NAND production revenue, it is currently a smaller revenue driver for the company (22.7% of total sales) than DRAM. There are several reasons NAND products are generating more revenue for the company. The first is Micron’s high-capacity G9 QLC NAND. This technology is important for AI training and inference workloads. It enables ultra-dense SSDs with capacities of 122TB and even 245TB. In addition, Micron launched the world’s first PCIe Gen6 SSD, created specifically to keep GPUs utilized during AI processing (Yahoo Finance). The other product category primarily consists of NOR Flash memory, designed for high-speed, random-access data reading.

Financial Analysis

During the last two fiscal years, Micron faced significant changes in revenue, net income, and EBITDA. In 2023, the company saw a massive 49.5% revenue decline and a net loss of about $5.8 billion due to several factors, including a post-pandemic supply glut, inventory correction, and China sanctions (Macrotrends). For example, during the pandemic, production increased to meet high demand for PCs and smartphones. This, however, led to an oversupply, causing memory prices to crash. In addition, a ban by China on Micron products impacted sales in one of its largest markets (Reuters). However, revenue increased significantly due to production cuts, early AI demand, the HBM (High Bandwidth Memory) boom, data center dominance, and other factors. In 2024, the company and its competitors cut wafer starts by up to 30%, which brought global supply back into balance. Special HBM chips for AI processors, like NVIDIA’s GPUs, became the primary growth driver in 2025. Likewise, sales of cloud and data center services increased, accounting for over 56% of total revenue (Yahoo Finance).

When it comes to earnings, the company beat market expectations last year. As mentioned above, the biggest driver of the beat was Micron’s dominance in HBM, a necessary tool for NVIDIA’s AI GPUs. Because of a global memory crunch, the company was able to push through 20% sequential price rises for DRAM, which also positively impacted actual earnings, exceeding estimates. In addition, revenue from cloud memory increased significantly, representing 40% of total sales. This was also one of the reasons market expectations were lower than the actual results

Moreover, Micron expects higher prices and lower costs to contribute to gross margin expansion in Q2. Its operating expenses are projected to be about $1.38 billion in Q2 FY2026. Other expectations for Q2 FY2026:

• Revenue: $18.7 billion ± $400 million
• Gross margin: 68.0% ± 1.0%
• Operating expenses: $1.38 billion ± $20 million
• Diluted earnings per share: $8.42 ± $0.20 (Micron)

On February 11, 2026, Micron’s CFO pointed out that volume shipments of next-gen HBM4 began in Q1 and will scale significantly in Q2 (Yahoo Finance). Following this news, the projected revenue, EPS, and other metrics are expected to be achievable.

Valuation analysis

As 2023 business conditions affected Micron's operations, they also affected investors. As mentioned above, post-pandemic demand for smartphones and PCs collapsed, while Micron's inventories remained at record highs, leading to write-downs and price cuts. After that collapse, the company continued to stabilize growth in 2024 and achieved significant increases in 2025. After data centers became the largest revenue driver, asset utilization (ROA) improved drastically. In 2025, ROE peaked at 17.2%, indicating highly efficient use of shareholder equity for AI-focused infrastructure. These indicators are expected to improve further due to higher revenue, gross margin expansion, and growth.

The company's current ratio reached 4.46 in 2023, driven by several factors. The company nearly doubled its total debt to handle a $5.8 billion net loss in 2023. That is why the ratio was higher, while Micron’s current liabilities dropped to $4.76 billion.

After demand for AI-related memory increased, current liabilities rose to $11.45 billion by 2025, as the company spent more on production and raw materials. In addition, following the 2023 memory market crash, Micron had a negative interest coverage ratio, meaning it was not generating enough profit to cover its interest payments.

Risks

There are several risks the company has faced and is currently facing:

• As Micron increased its capital expenditures to a record $20 billion to meet AI demand, similar spending by competitors such as Samsung and SK Hynix could lead to a supply glut, causing price declines (Seeking Alpha).
• There is also intense AI competition. Samsung recently began large-scale shipping of HBM4 with higher speeds, which may erode Micron’s market share (Reuters).
• Most of Micron’s revenue comes from just ten customers, making the company vulnerable to order cancellations from a single major player, such as NVIDIA or AMD. In addition, increasing memory prices for AI have raised component costs for PCs and smartphones, which could lead to a contraction in consumer electronics demand (Financial Content).

Conclusion

Micron Technology is known as a leader in high-performance memory for AI, data centers, and cloud infrastructure. Its revenue growth and improved financial performance have been driven by demand for the company's DRAM, NAND, and HBM products. Micron’s innovation, operational efficiency, and focus on AI-driven memory solutions have positioned the company for substantial growth, while some risks, such as intense competition and reliance on key customers, remain.

References

1. Musaffa- Micron Technology Inc
2. Tradingview- Can AI-Driven DRAM Demand Sustain Micron's Revenue Upswing?
3. Yahoo Finance- Micron Technology's NAND Revenues Reach $2.7B: Is It a Growth Lever?
4. MacroTrends- Micron Technology Revenue 2012-2025 | MU
5. Reuters- Micron to supply fewer memory chips in 2023, plans fresh capex cuts
6. Yahoo Finance- Micron Just Changed the AI Cycle—and the Market Knows It
7. Yahoo Finance-Micron stock rises 6% after CFO clarifies HBM4 production status
8. Seeking Alpha- Micron: Three Significant Risks That Could Be Crucial In The Long Term
9. Reuters- Samsung ships latest HBM4 chips to catch-up in AI race
10. Financial Content- Micron Technology (MU): Navigating the HBM4 Frontier in the AI Supercycle

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