Micron's Comeback Picks Up Steam. Is the Stock a Buy?

A brutal post-pandemic downturn in the memory-chip markets is finally coming to an end. Global shipments of PCs are expected to return to growth next year, and inventory levels across the PC supply chain are mostly back to normal. Smartphone shipments could rise, as well, after a prolonged slump, and the market for servers will be buoyed by insatiable demand for artificial intelligence (AI)-computing capacity.

These trends showed up in 's (NASDAQ: MU) fiscal first-quarter earnings report in the form of higher revenue, an improving gross margin, and rising average selling prices for DRAM and NAND chips. While 2024 will be a recovery year for Micron, the company expects 2025 to be a record year for the memory-chip industry.

Micron is still losing money, but there's now a light at the end of the tunnel. Revenue grew 16% year over year in the first quarter to $4.7 billion, driven mostly by sales of DRAM chips. DRAM bit shipments jumped more than 20% from the previous quarter, and average selling prices edged higher. The NAND business was mixed, with bit shipments dropping by a mid-teens percentage and average selling prices soaring by about 20%.

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Source Fool.com