Micron. Zoom, Zoom, Zoom, We're Going To The Moon...
My 5 year old recently developed an earworm from a song he learned at kindergarten in the run up to the recent mid-Autumn festival. It’s a very catchy phrase, “Zoom, Zoom, Zoom, we’re going to the moon”. Now, in the wake of Micron’s latest Nvidia-esque earnings report, I can’t get this line out of my head either. Here’s a clip, but health warning, it might become your next earworm!
Firstly, let’s review the basics. Revenue amounted to $7.8 billion which was $200 million above the guided midpoint, up 14% QoQ and up 93% YoY.
Net income almost doubled QoQ to reach $1.34 billion. Gross margin came in at 36.5%, which was 1.5 points above guidance. Then there was the forward guidance for revenue of $8.7 billion with gross margin 39.5%. This would be the company’s highest ever quarterly revenue, bringing the company firmly back to the heights of their two most recent boom periods.
Not surprisingly, the markets responded warmly to Micron’s print with the company’s share price soaring almost 15% in after hours trading.
Yesterday, SK Hynix was also up 8% on the back of Micron’s report, with Samsung up around 3%.
HBM was of course the main topic of interest to investors and Micron did not disappoint. For starters, they increased their CY2025 HBM TAM from $21 billion to $25 billion while reiterating confidence in their goal to achieve a similar share in that market to that which they hold in the overall DRAM market today. For the record, that’s around 20%.
So we're not gonna be providing specifics on a quarter by quarter basis but keep in mind yes we delivered several hundred million dollars of revenue in fiscal year 24 and we look forward to delivering multiple billions of dollars of revenue of HBM in fiscal year 25 okay
A quick back of an envelope calculation helps us clarify that Micron’s annual HBM run rate exiting 2025 should be around $5 billion. That’s one fifth of their entire revenue for their FY2024!
However, HBM is not the only tailwind rising for Micron. They had impressive results in other segments also, notably automotive, and in other products, notably enterprise SSD. In fact, we learned that Micron has three different data center product categories, each of which will bring in multiple billions worth of revenue in the coming year. Let’s dig in….
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