Micron technology (UM 10.45%) The stock is up sharply in Monday trading. The storage solutions company’s stock price was up 11.7% as of 1 p.m. EST amid a 1% gain for the market. S&P500 index and a 1.5% rally for the Nasdaq Composite hint.
Micron stock gains ground today thanks to Nvidia-related news. Investors got a new indicator that demand for artificial intelligence (AI) the leader’s hardware remains very strong, and there is also excitement that the AI pioneer’s CEO will be able to discuss new hardware incorporating Micron’s technologies during his presentation tonight.
Nvidia Supercharges Micron Stock Today
Foxconn Technology released its fourth quarter results before the market opened this morning and reported record revenue. The China-based technology manufacturing company said it was seeing strong sales of AI servers. Nvidia is one of Foxconn’s biggest customers. Meanwhile, Micron’s technology is present in Nvidia’s Blackwell B200 and GB200 platforms.
In addition to the promising sales indicator, investors are also excited about Nvidia CEO Jensen Huang’s keynote speech at the CES conference this evening. Huang is expected to share new details about his company’s upcoming GB300, a new processor that should offer a substantial performance jump over its already super-powerful GB200 line. With Micron’s technology already included in the GB200, it’s not a stretch to think that the memory solutions company will score design wins in the GB300 as well.
What’s next for Micron?
Micron stock has been volatile lately. The company released its first-quarter fiscal 2025 results on Dec. 18 and reported higher-than-expected sales and profits for the period, but management’s guidance greatly disappointed the market. For the second quarter, Micron expected revenue of about $7.9 billion and earnings per share of $1.43. At the same time, the average analyst estimate was for revenue of $8.98 billion and earnings per share of $1.91. Company management attributed the weak outlook to slow growth in consumer market areas and inventory adjustments.
Even with today’s rise, Micron stock is trading down about 35% from last year’s high. The memory chip market tends to be very cyclical and investors are divided on the company’s performance prospects. On the other hand, the stock appears to be a big winner for long-term investors. Micron projects that the total addressable market in the HBM category will grow from $16 billion in 2024 to more than $100 billion by 2030, and it is well positioned to be a leader in this space.
Keith Noonan holds positions in Micron technology. The Motley Fool Ranks and Recommends Nvidia. The Motley Fool has a disclosure policy.