while AI shares which have been scattered in recent weeks, Micron technology (NASDAQ:MU) maintains its right to deliver strong returns.
Micron, a leading manufacturer of high-bandwidth memory and storage chips for artificial intelligence and other applications, has seen its success stock Price rises about 13% Thursday after blasting fiscal first-quarter earnings were released.
the The stock is now up a ridiculous 202% year to dateand has not been hit by a valuation wall in recent weeks, which has led to a decline in most AI stocks.
That’s because for all his success, he is Its value is still reasonable, some might even call it undervalued. The stock has a P/E ratio of 21 and a Forward P/E ratio of just 11. Moreover, its PEG ratio is a meager 0.19Which suggests that it is undervalued compared to its long-term earnings outlook.
That means it should have plenty of room to run, even after rising 13% on Thursday and 202% so far in 2025.
Explosion profits
Micron generated Record revenue in Q1 It ended on November 27, generating $13.64 billion, up 20% from the previous quarter and up from $11.32 billion for the previous quarter and 56% year over year. That blew away estimates of $12.8 billion.
The chipmaker had net income of $5.2 billion, or $4.60 per share. An increase of 62% from the previous quarter and approximately 175% year over year. That crushed estimates of $3.94 per share.
Gross margin was 56%, up from 44.7% in the previous quarter and 38.4% in the prior year’s fiscal first quarter.
The cloud memory business is basically the part that makes high bandwidth AI memory chips for AI data centers and hyperscalers such as Microsoft, Amazon, and Google. It also makes memory chips suitable for chip makers Nvidia, Intel and AMD And manufacturers like Apple, Dell and Samsung. Therefore, Micron has positioned itself as an important partner in the midst of the AI boom.
99% growth in cloud memory
This is clearly evident when you look at the explosive growth of the cloud. The company generated about $5.3 billion in revenue in this business last quarter, up to 99% From the same quarter a year ago.
“In our fiscal first quarter, Micron achieved record revenue and significant margin expansion company-wide as well as in each of our business units.” said Sanjay Mehrotra, Chairman, President and CEO of Micron. “Our second-quarter outlook reflects strong records across revenue, gross margin, EPS and free cash flow, and we expect our business performance to continue to strengthen through fiscal 2026. Micron’s technology leadership, differentiated product portfolio, and strong operational execution position us as a key AI enabler, and we are investing to support our customers Increased need for memory and storage“.
For the second fiscal quarter Micron is on track for revenue of $18.7 billion, which would be up 37% from the first quarter. Gross margin expectations are 66%, up from 56% last quarter, while Earnings are targeted at $8.19 per sharewhich will be up significantly from $4.60 per share last quarter.
We’ve been in contact for a long time One micron of better The stock is therenot only for the strength of its earnings but also for its low-to-reasonable valuation — and the earnings report didn’t change that view.
