Where Micron fits in AI revolution and what it means for MU shares

Micron Technology Inc (NASDAQ: MU) is in focus this morning after reporting a strong Q3 and offering equally encouraging guidance for the future.

The multinational’s quarterly release indicates strong AI-driven demand for its memory chips – and yet not a lot of investors completely understand where MU fits in data centres and the broader artificial intelligence revolution.

That’s what the company’s chief executive, Sanjay Mehrotra, unraveled in a post-earnings interview with CNBC on Thursday.

What makes Micron a ‘key enabler’ of AI?

According to Sanjay Mehrotra, Micron sits right at the heart of the data revolution since “memory is a key enabler of AI [which] require more and more data … data lives in the chips we make.”

MU has emerged as a pivotal artificial intelligence name, not by building LLMs, but by supplying the memory infrastructure that makes them possible, he added.

At the heart of this transformation is Micron’s high-bandwidth memory (HBM), particularly the next-generation HBM4, which CEO Mehrotra described as a “technical marvel” in his interview with CNBC.

HBM4 is engineered to meet the soaring demands of generative AI, large language models, and inference workloads.

With a 2048-bit interface and speeds exceeding 2.0 TB/s per memory stack, it delivers over 60% better performance than its predecessor while improving power efficiency by more than 20%.

MU has already shipped HBM4 samples to key customers and is sold out for calendar year 2025, with volume ramping expected in 2026, the company’s chief executive told CNBC today.

Investors should note that this isn’t just a technological leap – it’s a commercial one.

Micron’s HBM revenue is now running at an annualized rate of over $6 billion, and the company expects this to grow further in fiscal 2026.

Note that a small dividend yield of 0.37% makes MU shares even more exciting to own in 2025.

MU shares could benefit from AI-enabled PCs

While data centers are the current growth engine, Micron is also betting on AI-enabled PCs and smartphones.

Though adoption has been slower than expected, Mehrotra remains confident that the Windows 11 upgrade cycle and next-gen smartphone launches will drive demand.

Importantly, even with modest unit growth, the memory content per device is increasing – 12GM DRAM in new smartphones versus 8GB last year – translating into mid-teens growth for Micron.

This shift toward higher-value, content-rich products is part of MU’s broader transformation from a cyclical memory supplier to a more resilient, innovation-led company.

“Micron is now an agile and adaptive company,” Mehrotra emphasized, “delivering sustained growth through the cycles.”

That’s primarily why Wall Street remains bullish on Micron stock even though it has already close to doubled in recent months.

Consensus rating on MU shares currently sits at “overweight” with a mean target of about $146 indicating a potential upside of another 18% from here.