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Micron's HBM solution is helping to solve a critical AI bottleneck.
MU is projected to grow earnings 800% in 2026.
Gross margins have been improving since 2024.
Micron Company Overview
Zacks Rank #1 (Strong Buy) stock Micron ((MU - Free Report) ) is one of the three major global suppliers of High Bandwidth Memory (HBM). Micron’s 3D-stacked DRAM (dynamic random-access memory) architecture is an integral part of the technology stack needed to run high-performance AI data centers. Currently, the biggest bottleneck of the AI buildout is that fast NVIDIA ((NVDA - Free Report) ) GPUs (Graphics Processing Units) waste time waiting for slow memory solutions to feed them data. Instead of placing memory chips flat on the motherboard and connecting them to the processor with long, narrow wires, Micron’s HBM technology vertically stacks them on top of each other, allowing for lightning-fast memory access.
Micron: Insatiable, Predictable Demand
Micron is capitalizing on the AI boom with its HBM solutions that are being adopted across high-performance AI infrastructure. Micron’s last earnings report reflects just heavy demand, tight supply, product leadership, robust customer agreements, manufacturing expansion, and rising cash generation across cycles. Last quarter, MU delivered its 13th consecutive beat of Zacks Consensus Analyst Expectations.
Image Source: Zacks Investment Research
Meanwhile, Wall Street expects 2026 EPS to grow nearly 800%. If MU is to meet these expectations, it would mean that the company has earned more profit in 2026 than in the past two decades combined!
Image Source: Zacks Investment Research
DRAM Pricing & Margins
The ongoing momentum in the DRAM market is a major tailwind for Micron. DRAM revenues accounted for 76% of Micron’s total sales in the third quarter and increased 67% sequentially. As a result, MU’s gross margins have grown steadily over the past few quarters.
Image Source: Zacks Investment Research
Manufacturing Expansion
Although MU is sold out for the foreseeable future, the company has recently made several acquisitions and capacity investments to enhance its capabilities. Most recently, the company completed the acquisition of the Powerchip Semiconductor Manufacturing facility in Taiwan, adding much-needed manufacturing space.
High Probability Technical Zone
MU shares have ridden the 10-week moving average for the past few years, and each dip has proven to be an asymmetric buying opportunity. Currently, shares are retreating to the intermediate-term moving average for the first time in 2026.
Image Source: TradingView
Bottom Line
With an architecture that directly solves AI’s toughest physical hardware bottleneck, an aggressively expanding manufacturing footprint in Taiwan, and unprecedented earnings power projected through 2026, Micron remains the quintessential picks-and-shovels play of this hardware cycle.
View the Zacks #1 Rank List
Bull of the Day: Micron (MU)
Key Takeaways
Micron Company Overview
Zacks Rank #1 (Strong Buy) stock Micron ((MU - Free Report) ) is one of the three major global suppliers of High Bandwidth Memory (HBM). Micron’s 3D-stacked DRAM (dynamic random-access memory) architecture is an integral part of the technology stack needed to run high-performance AI data centers. Currently, the biggest bottleneck of the AI buildout is that fast NVIDIA ((NVDA - Free Report) ) GPUs (Graphics Processing Units) waste time waiting for slow memory solutions to feed them data. Instead of placing memory chips flat on the motherboard and connecting them to the processor with long, narrow wires, Micron’s HBM technology vertically stacks them on top of each other, allowing for lightning-fast memory access.
Micron: Insatiable, Predictable Demand
Micron is capitalizing on the AI boom with its HBM solutions that are being adopted across high-performance AI infrastructure. Micron’s last earnings report reflects just heavy demand, tight supply, product leadership, robust customer agreements, manufacturing expansion, and rising cash generation across cycles. Last quarter, MU delivered its 13th consecutive beat of Zacks Consensus Analyst Expectations.
Image Source: Zacks Investment Research
Meanwhile, Wall Street expects 2026 EPS to grow nearly 800%. If MU is to meet these expectations, it would mean that the company has earned more profit in 2026 than in the past two decades combined!
Image Source: Zacks Investment Research
DRAM Pricing & Margins
The ongoing momentum in the DRAM market is a major tailwind for Micron. DRAM revenues accounted for 76% of Micron’s total sales in the third quarter and increased 67% sequentially. As a result, MU’s gross margins have grown steadily over the past few quarters.
Image Source: Zacks Investment Research
Manufacturing Expansion
Although MU is sold out for the foreseeable future, the company has recently made several acquisitions and capacity investments to enhance its capabilities. Most recently, the company completed the acquisition of the Powerchip Semiconductor Manufacturing facility in Taiwan, adding much-needed manufacturing space.
High Probability Technical Zone
MU shares have ridden the 10-week moving average for the past few years, and each dip has proven to be an asymmetric buying opportunity. Currently, shares are retreating to the intermediate-term moving average for the first time in 2026.
Image Source: TradingView
Bottom Line
With an architecture that directly solves AI’s toughest physical hardware bottleneck, an aggressively expanding manufacturing footprint in Taiwan, and unprecedented earnings power projected through 2026, Micron remains the quintessential picks-and-shovels play of this hardware cycle.