Micron's March Earnings: A Crucial Test for the AI Memory Rally

Micron's Q2 results on March 18 will test its bold $18.7B revenue forecast and the sustainability of the AI-driven memory chip boom, with HBM demand in focus.

All eyes are on Micron Technology as it prepares to release its quarterly financial results on March 18. The memory chip giant faces immense pressure to meet its own ambitious forecast, following a staggering 290% surge in its share price over the past year. This report will serve as a critical indicator of whether the artificial intelligence-driven demand for memory chips has lasting power.

Surging Expectations and Analyst Confidence

In mid-December, when presenting its Q1 fiscal 2025 results, Micron issued a bold projection for its ongoing second quarter. The company guided for revenue of $18.70 billion and earnings per share of $8.42. This would represent a dramatic leap from the preceding quarter's figures of $13.64 billion in revenue and $4.78 in EPS.

Market experts express strong confidence in the company's ability to achieve this goal. In early February, Deutsche Bank significantly raised its price target from $300 to $500, citing persistent supply constraints in the DRAM market. The bank's analysis suggests these shortages could extend into 2027 or 2028. Needham followed with an increase to $450. The current analyst consensus sits at $350, while Micron's market capitalization hovers around $470 billion.

Capitalizing on High-Bandwidth Memory Demand

The primary driver behind this optimistic outlook is the booming business in High-Bandwidth Memory (HBM), a critical component for AI accelerators. In December, Micron disclosed that it had already secured contractual agreements for all HBM volumes and pricing through the 2026 calendar year, including its upcoming HBM4 product. The cloud memory segment, which includes HBM, generated $5.3 billion in revenue last quarter with an impressive gross margin of 66%.

To keep pace with overwhelming demand, Micron is aggressively ramping up investment. The company has increased its capital expenditure budget for fiscal 2026 from $18 billion to $20 billion. Furthermore, construction began in January on a new $24 billion fabrication plant in Singapore.

Speculation Around a Potential Stock Split

With its share price recently trading near 358 euros, market participants are beginning to speculate about a potential stock split. Industry peers like Nvidia and Broadcom have executed splits at similar valuation levels to enhance share liquidity and accessibility for a broader investor base.

The upcoming March 18 announcement, scheduled for release at 22:30 German time, will provide a definitive answer. The central question remains: Can Micron deliver on its own forecast and substantiate the sustainability of the AI-fueled memory boom? The results will likely set the tone for the sector's trajectory in the coming months.