MW Micron's stock soared in June. Here's what investors want to see from its earnings.

By Britney Nguyen

The memory-chip maker's stock is among the S&P 500's top performers in June, as investors stay bullish on better DRAM pricing and demand for HBM chips

With Micron Technology Inc.'s shares among the top performers in the S&P 500 this month, investors will be carefully assessing the company's fiscal third-quarter earnings report on Wednesday.

Sustaining the stock's $(MU)$ recent momentum will depend on how investors feel about its near-term gross margins, according to one Wall Street analyst.

Investors have been "super bullish" on Micron and other memory-chip and hard-disk-drive stocks, Mizuho Securities desk-based analyst Jordan Klein said in a note earlier this month. Part of the reason is the company's pricing updates on dynamic random-access memory $(DRAM)$ chips that, so far, "all sound super positive," Klein said.

Micron is a leader in DRAM production, and demand for high-bandwidth memory chips, which are a specialized type of DRAM, is growing as Nvidia Corp. $(NVDA)$ ramps up its Blackwell artificial-intelligence platform, Klein noted.

In May, Nvidia said during its fiscal first-quarter earnings call that its Blackwell ramp has been the fastest in the company's history, and that it is seeing more demand as hyperscalers focus on inferencing for reasoning models and agentic AI. Inference is the process that comes after training an AI model when it uses what it has "learned" to make more predictions.

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With Nvidia's next-generation Blackwell Ultra chips expected to come later this year or early next year, "the HBM density rises materially," Klein said, which would be good for Micron and other HBM suppliers.

The improved DRAM pricing and strong HBM-chip demand is leading many investors to "[buy] into the late-June [Micron] earnings given fear they will miss a break out back to the highs," Klein added.

The Mizuho analyst said investors will be looking for how much Micron guides up on its gross margins in the near term. Investors on the sell side are expecting gross margins at 36.7% for the current quarter and 39% for the August quarter, Klein noted. The company will "have to beat both modestly" to help its stock performance, he added.

The memory-chip maker is expected to report revenues of $8.9 billion for the May quarter, according to analysts' estimates compiled by FactSet, with DRAM sales making up $6.9 billion of that estimate. Analysts are also looking for adjusted earnings of $1.60 per share.

In its latest earnings report, Micron set fiscal third quarter revenue guidance at $8.8 billion, plus or minus $200 million. The company said it expects an adjusted gross margin of 36.5%, plus or minus 1%, for the quarter, which is in line with what sell-side investors expect, according to Klein.

Micron is also looking at gaining more market share from rival Samsung Electronics Co. Ltd. (KR:005930), Klein said, which is reportedly having trouble passing Nvidia's qualification test with its HBM3E memory chips, while Micron is improving its HBM-chip yields. The company said earlier this month that it has started shipping its HBM4 chips to customers.

Meanwhile, Micron also said earlier this month that it has finalized $275 million in direct funding from the Biden-era Chips and Science Act that will support the expansion and modernization of an existing chip-manufacturing facility in Virginia. The plan is part of the company's expansion of its investment in the U.S. to $200 billion, which will also go toward two high-volume chip-fabrication sites in Idaho and up to four in New York.

-Britney Nguyen

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June 23, 2025 17:24 ET (21:24 GMT)

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