Prediction: This Artificial Intelligence (AI) Semiconductor Stock Is Set to Soar After Dec. 18


Surprisingly, Micron Technology (NASDAQ: MU) stock turned in a disappointing performance on the stock market in 2024. It clocked gains of just 20%, despite delivering solid results in recent quarters that point toward outstanding growth in the company’s revenue and earnings.

Shares of the memory specialist are down 27% since hitting a 52-week high in mid-June. However, it won’t be surprising to see the stock’s fortunes changing after Micron releases its fiscal 2025 first-quarter results on Dec. 18.

Let’s see why that may be the case.

Micron Technology is known for manufacturing memory chips for both computing and storage. This market is historically cyclical in nature, depending on the demand for personal computers (PCs) and smartphones. This explains why the global memory market plunged nearly 39% last year, as per Gartner’s estimates, owing to a 4.4% drop in shipments of PCs, smartphones, and tablets.

The drop in device shipments was more pronounced in 2022, with a decline of 11.9%. Not surprisingly, Micron’s financial performance in 2022 and 2023 suffered.

MU Revenue (TTM) Chart
MU Revenue (TTM) data by YCharts.

However, the memory industry has been in turnaround mode this year. It’s driven by catalysts such as artificial intelligence (AI) that are driving a jump in memory consumption across multiple areas, such as data centers, smartphones, and PCs. For example, the usage of high-bandwidth memory (HBM) in AI chips has increased at an incredible pace, as the likes of Nvidia have been integrating this type of memory to make their AI accelerators more powerful.

Nvidia’s latest Blackwell B200 GPU is equipped with 192 gigabytes (GB) of HBM, which is a big improvement over the previous-generation H100’s 96 GB and H200’s 144 GB. This factor could help Micron deliver better-than-expected results. That’s because when Nvidia released its latest quarterly results last month, management pointed out that its Blackwell production ramp-up is happening at a stronger-than-expected rate.

Nvidia points out that it is on track to “exceed our previous Blackwell revenue estimate of several billion dollars as our visibility into supply continues to increase.” This is good news for Micron, as the chipmaker has already been supplying its HBM chips to Nvidia. The stronger Blackwell demand could help it beat the market’s expectations. Catalysts such as HBM also explain why the global memory market is expected to generate $163 billion in revenue this year, up significantly from $92 billion last year.



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