Micron Technology (MU) closed out fiscal 2025 with record results, riding the AI wave to soaring revenue and profits. But despite the blowout quarter, shares slipped as investors weighed whether the good news was already priced in.
Key Points
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Micron posted Q4 revenue of $11.3 billion, up 46% year-over-year, with earnings more than doubling.
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AI-driven high-bandwidth memory (HBM) sales nearly doubled from last quarter, reaching almost $2 billion.
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Strong guidance for Q1 2026 shows continued momentum, though shares dipped as expectations were sky-high.
Why Did Micron’s Stock Fall After a Blowout Quarter?
Micron crushed estimates with Q4 revenue of $11.3 billion and earnings of $3.03 per share, far ahead of last year’s $1.18. Full-year revenue hit $37.4 billion, nearly 50% higher than 2024, while net income surged more than tenfold to $9.5 billion.
The driver? AI demand. Micron’s HBM business soared, bringing in nearly $2 billion in Q4 alone. Its data center segment, now over half of company revenue, is booming as AI infrastructure spending explodes.
Yet, despite those numbers, MU stock dipped about 2% in early trading. Why? Because investors may feel much of this AI-driven growth is already baked into the stock after a massive rally earlier this year.
How Is Micron Positioned in the AI Chip Race?
Micron is emerging as a leader in the AI memory market, competing with SK Hynix and Samsung. Its HBM supply is fully booked through 2025, with demand visibility into 2026. The company is already sampling HBM4, the next generation of chips expected to power future AI servers.
CEO Sanjay Mehrotra called fiscal 2025 a “record-breaking year,” highlighting Micron’s unique role as the only U.S.-based memory manufacturer. With CHIPS Act funding and new facilities in Idaho, New York, and Japan, Micron is ramping up capacity to meet demand.
What Is Micron’s Outlook for 2026?
Looking ahead, Micron expects Q1 2026 revenue of $12.5 billion and gross margins above 50% — levels not seen in years. Adjusted EPS is forecast around $3.75, topping analyst expectations.
Management also noted strong demand across PCs, smartphones, and autos, as AI adoption spreads beyond data centers. That said, challenges remain: NAND sales slipped 5% year-over-year, operating expenses are climbing, and the memory market is famously cyclical.
What It Means for Investors
For retail investors, Micron’s story is a classic example of the “AI trade.” The company has strong fundamentals, record guidance, and booked-out supply. However, after a 40% rally this year, near-term upside could be limited unless another growth catalyst appears.
Micron remains one of the clearest beneficiaries of the AI boom, but volatility should be expected. Investors may want to weigh long-term AI exposure against short-term market cycles.
Conclusion
Micron delivered another blowout quarter, proving it is at the center of the AI-driven memory chip market. But with Wall Street already pricing in much of the good news, MU shares could see turbulence ahead. Still, as AI adoption accelerates, Micron’s leadership in HBM and DRAM leaves it well-positioned for the long run.
FAQs
Is Micron stock a buy right now?
Micron has strong fundamentals and record earnings, but its stock already reflects much of the AI-driven momentum. Long-term investors may still see upside, while short-term traders should expect volatility.
Why did Micron stock drop after earnings?
Despite beating expectations, shares dipped because investors felt the results were already priced in after a 40% rally this year. Markets often “sell the news” when expectations are extremely high.
How important is HBM to Micron’s future?
Very important. HBM revenue nearly doubled last quarter and now makes up 16% of Micron’s total sales. Demand is fully booked through 2025, with new HBM4 chips expected in 2026, securing Micron’s role in AI data centers.
What risks should investors watch?
The memory chip market is cyclical. NAND weakness, rising R&D costs, and global policy shifts could affect margins. Micron’s heavy reliance on AI demand is also a concentration risk.
How does Micron compare to competitors like SK Hynix and Samsung?
Micron and SK Hynix have been quicker than Samsung to roll out the latest HBM chips, giving them an edge in the AI memory market. Micron also benefits from being the only U.S.-based memory supplier, with government support through CHIPS Act funding.