Micron Technology (MU, Financial) investors have faced difficulties recently as the stock enters a bear market after peaking in mid-2024. Despite lackluster guidance in its December earnings report, the company's role as a key U.S. player against South Korean memory giants like SK Hynix and Samsung is notable. The memory industry is inherently cyclical, with Micron experiencing revenue growth peaks in 2017 and downturns by 2019, pre-pandemic. Currently, high-bandwidth memory (HBM) chips are driving industry demand, but Micron's position remains precarious due to competition and reliance on NVIDIA.
Data center revenue now makes up over 50% of Micron's income, up from 20% the previous year, but non-AI segments lag. The company is banking on AI demand to surge, yet faces risks if NVIDIA's growth slows. Market valuations for memory chip makers have decreased, with Micron's stock dropping from $153 to below $90, presenting a potentially attractive investment opportunity.
