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MU's HBM Revenues Surpass $1 Billion: Will the Momentum Persist?
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Key Takeaways
Micron's HBM revenues surpassed $1 billion in Q2 FY25, driven by AI and high-performance computing demand.
Strong demand for MU's HBM3E variants has sold out 2025 supply; focus now shifts to 2026 delivery deals.
Micron is ramping HBM4 production in 2026, targeting 60% more bandwidth versus current HBM3E chips.
Micron Technology’s (MU - Free Report) high bandwidth memory (HBM) chips are experiencing robust traction due to their growing use in high-performance computing, hyperscalers and artificial intelligence data centers. The high demand for these chips has led to Micron’s HBM revenues crossing $1 billion in the second quarter of fiscal 2025, marking a major milestone.
Since Micron’s HBM3E and HBM3E-12H variants offer significant power reduction in comparison to its competitors while also delivering higher memory capacity, customers have already placed a large demand for these products, resulting in Micron being fully sold out of its HBM supply for calendar 2025.
The HBMs developed by Micron have a total addressable market estimate of more than $35 billion for the calendar year 2025. Now the company is focusing on HBM delivery agreements for 2026. It is worth noting that the largest AI-chip manufacturer, NVIDIA (NVDA - Free Report) , announced in January 2025 that Micron is a key supplier for its GeForce RTX 50 Blackwell GPUs, solidifying Micron’s positioning in the HBM market. NVIDIA has installed Micron’s HBM3E 8H chips inside the NVIDIA GB200 system and HBM3E 12H chips in NVIDIA GB300.
To top it all off, Micron is developing the next generation of high bandwidth memory, HBM4, which will increase the bandwidth by more than 60% compared to HBM3E. The company will ramp the production volume of HBM4 in 2026. With Micron experiencing a sequential surge of 50% in HBM revenues in the second quarter of fiscal 2025, and considering its future plans, it is quite evident that momentum in HBMs will persist.
Micron anticipates third-quarter fiscal 2025 revenues of $8.80 billion (+/-$200 million). The Zacks Consensus Estimates for third-quarter fiscal 2025 is pegged at $8.81 billion, indicating year-over-year growth of 29.33%.
How Competitors Fare Against Micron
The global HBM market is highly consolidated, with a handful of players in this space. Companies, including SK hynix, TSMC (TSM - Free Report) and Samsung, exist in this space. However, not all of them compete directly against Micron.
While SK Hynix and Samsung develop their own HBM2E, HBM3, and HBM3E, TSMC develops HBM packages based on SK Hynix’s HBMs. In 2024, SK hynix and TSMC collaborated to collectively develop HBM4 and next-generation packaging technology.
This collaboration has led SK hynix to adopt TSMC’s foundry process to develop its HBM4, showcased for the first time in April 2025. Since the HBM space has a few capable players and huge growth opportunities, this provides a strong growth opportunity for Micron.
Micron’s Price Performance, Valuation and Estimates
Shares of MU have gained 31.8% year to date compared with the Zacks Computer - Integrated Systems industry’s growth of 15.1%.
Image Source: Zacks Investment Research
From a valuation standpoint, MU trades at a forward price-to-sales ratio of 2.84X, lower than the industry’s average of 3.53X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MU’s fiscal 2025 earnings implies year-over-year growth of 433%, while the 2026 earnings estimate implies growth of 55.87%. The estimates for fiscal 2025 earnings have been revised upward, while the 2026 earnings have been revised downward in the past 60 days.
Image: Shutterstock
MU's HBM Revenues Surpass $1 Billion: Will the Momentum Persist?
Key Takeaways
Micron Technology’s (MU - Free Report) high bandwidth memory (HBM) chips are experiencing robust traction due to their growing use in high-performance computing, hyperscalers and artificial intelligence data centers. The high demand for these chips has led to Micron’s HBM revenues crossing $1 billion in the second quarter of fiscal 2025, marking a major milestone.
Since Micron’s HBM3E and HBM3E-12H variants offer significant power reduction in comparison to its competitors while also delivering higher memory capacity, customers have already placed a large demand for these products, resulting in Micron being fully sold out of its HBM supply for calendar 2025.
The HBMs developed by Micron have a total addressable market estimate of more than $35 billion for the calendar year 2025. Now the company is focusing on HBM delivery agreements for 2026. It is worth noting that the largest AI-chip manufacturer, NVIDIA (NVDA - Free Report) , announced in January 2025 that Micron is a key supplier for its GeForce RTX 50 Blackwell GPUs, solidifying Micron’s positioning in the HBM market. NVIDIA has installed Micron’s HBM3E 8H chips inside the NVIDIA GB200 system and HBM3E 12H chips in NVIDIA GB300.
To top it all off, Micron is developing the next generation of high bandwidth memory, HBM4, which will increase the bandwidth by more than 60% compared to HBM3E. The company will ramp the production volume of HBM4 in 2026. With Micron experiencing a sequential surge of 50% in HBM revenues in the second quarter of fiscal 2025, and considering its future plans, it is quite evident that momentum in HBMs will persist.
Micron anticipates third-quarter fiscal 2025 revenues of $8.80 billion (+/-$200 million). The Zacks Consensus Estimates for third-quarter fiscal 2025 is pegged at $8.81 billion, indicating year-over-year growth of 29.33%.
How Competitors Fare Against Micron
The global HBM market is highly consolidated, with a handful of players in this space. Companies, including SK hynix, TSMC (TSM - Free Report) and Samsung, exist in this space. However, not all of them compete directly against Micron.
While SK Hynix and Samsung develop their own HBM2E, HBM3, and HBM3E, TSMC develops HBM packages based on SK Hynix’s HBMs. In 2024, SK hynix and TSMC collaborated to collectively develop HBM4 and next-generation packaging technology.
This collaboration has led SK hynix to adopt TSMC’s foundry process to develop its HBM4, showcased for the first time in April 2025. Since the HBM space has a few capable players and huge growth opportunities, this provides a strong growth opportunity for Micron.
Micron’s Price Performance, Valuation and Estimates
Shares of MU have gained 31.8% year to date compared with the Zacks Computer - Integrated Systems industry’s growth of 15.1%.
Image Source: Zacks Investment Research
From a valuation standpoint, MU trades at a forward price-to-sales ratio of 2.84X, lower than the industry’s average of 3.53X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MU’s fiscal 2025 earnings implies year-over-year growth of 433%, while the 2026 earnings estimate implies growth of 55.87%. The estimates for fiscal 2025 earnings have been revised upward, while the 2026 earnings have been revised downward in the past 60 days.
Image Source: Zacks Investment Research
MU currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here