SSD Demand Aids Micron's NAND Growth: Can the Momentum Continue?

Micron Technology’s MU NAND revenues grew 16% quarter over quarter to $2.2 billion in the third quarter of fiscal 2025. The strong sequential growth in NAND revenues was mainly driven by a mid-20% increase in bit shipments. Strong demand for its solid-state drives (SSDs) across the client and data center end markets mainly drove robust growth in bit shipments.

In client SSDs, Micron achieved a record market share in the calendar first quarter. This was supported by its vertically integrated product portfolio. In data center SSDs, MU maintained record market share for the third straight quarter. This market dominance reflects the competitive advantage the company enjoys through its robust portfolio.

To further strengthen its position, Micron launched new SSDs based on its latest G9 QLC NAND, which includes Adaptive Write technology. According to Micron, these new SSDs deliver up to four times the performance of typical QLC SSDs. The company expects these products to benefit from trends like the growing adoption of artificial intelligence in PCs.

Management expects its NAND bit supply growth for calendar 2025 to remain below industry bit demand growth. This limited supply scenario could result in increased prices, supporting scope for margin expansion. 

Together, these factors point to improving momentum in Micron’s NAND business, supported by growing SSD demand and tighter supply. The Zacks Consensus Estimate for fiscal 2025 NAND revenues is pegged at $8.52 billion, indicating year-over-year growth of 17.9%. Fiscal 2025 total revenues are estimated to grow 46.5% to $36.79 billion.

How Competitors Fare Against Micron

Micron competes with Western Digital Corporation WDC and Seagate Technology Holdings plc STX in the data storage market.

Micron competes with Western Digital in the NAND market. Western Digital is a diversified storage company with a broader portfolio that includes both traditional hard disk drives (HDDs) and NAND-based SSDs.

Seagate is a major force in the HDD market, particularly for high-capacity storage solutions for data centers and cloud infrastructure. Seagate is also developing its presence in the SSD market through portfolio expansion and partnerships.

MU’s Price Performance, Valuation and Estimates

Shares of MU have gained 32.2% year to date compared with the Zacks Computer - Integrated Systems industry’s growth of 27.5%.

MU YTD Price Performance

From a valuation standpoint, MU trades at a forward price-to-sales ratio of 2.61X, lower than the industry’s average of 3.76X.

MU Forward 12-Month P/S Ratio

The Zacks Consensus Estimate for Micron’s fiscal 2025 earnings implies year-over-year growth of 497.7%, while the 2026 earnings estimate implies growth of 57.9%. The earnings estimates for fiscal 2025 and 2026 have both been revised upward in the past 30 days, respectively. 

 
MU currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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