Micron (MU) Drives Stock Market with 938% Surge in Net Profit... Will It Dethrone Nvidia?

▲ Micron (MU), HBM, Artificial Intelligence (AI), Memory Chip/AI Generated Image

An analysis suggests that Micron Technology Inc. (MU), a strong player in memory semiconductors, will emerge as the biggest driver of profit growth in the U.S. stock market, breaking Nvidia's monopoly that has led the artificial intelligence (AI) semiconductor rally.

According to MarketWatch, a U.S. financial media outlet, on September 27 (local time), Micron is set to announce its fiscal Q4 earnings on September 30, and Wall Street has evaluated the earnings report itself as a key event for the entire market. The analysis indicates that the surging demand for AI infrastructure construction, particularly for High Bandwidth Memory (HBM), has significantly strengthened the pricing power of memory suppliers.

According to major Wall Street aggregations, the Q3 corporate earnings growth rate for the S&P 500 technology sector is expected to reach 41.9%. However, if Nvidia Corp. (NVDA) and Micron are excluded, the overall earnings growth rate for tech stocks plummets by nearly half to 20.5%. Micron, in particular, was identified as the key driver to most powerfully boost the overall index's profit growth, recording an explosive 938% surge in net profit and a 348.6% increase in revenue year-over-year.

While Nvidia's revenue growth is entering a gradual normalization phase, Micron is maximizing its earnings leverage effect in conjunction with continuous data center investments by cloud companies. The rapid rise in memory prices has led to an explosion in performance, with the recent quarterly gross margin vertically climbing from 38% in the same period last year to around 85%. Market experts diagnose that securing memory bandwidth is emerging as a critical bottleneck, as essential as high-performance tensor processor computations, and thus the concentration of profits within the semiconductor value chain is rapidly shifting towards the memory sector.

[Key Summary of the Article]

-Micron is expected to surpass Nvidia and emerge as the biggest contributor to S&P 500 corporate earnings growth.

-Excluding Nvidia and Micron, the S&P 500 tech sector's earnings growth rate of 41.9% halves to 20.5%.

-Micron's Q4 net profit is expected to surge by 938% due to a sharp rise in margins driven by explosive HBM demand.

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