Micron's latest move says more about AI than you think

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Micron Technology is stepping backmost from the user representation business, and it is not conscionable a cost-cutting move. In a connection posted connected its capitalist site, the institution confirmed it would “exit the Crucial user merchandise line” to amended enactment “larger, strategical customers successful faster-growing segments.”

Micron said successful the announcement:

Shipments of Crucial-branded products volition proceed done the 2nd fiscal quarter, which ends successful February 2026. However, the determination indicates a greater accidental to merchantability high-bandwidth representation and AI-grade silicon to businesses.

<em>Micron is aligning its superior spending and capableness with AI information halfway growth</em>Photo by Cheng Xin connected Getty Images

This is not happening successful isolation. Micron says the "overwhelming majority" of its superior spending for fiscal twelvemonth 2025, which is expected to beryllium astir $14 billion, volition spell into HBM and different back-end manufacturing that aligns with AI workloads.

In different words, Crucial's departure is portion of a bigger displacement toward information centers, AI inference, and server platforms wherever request is increasing quickly, and prices are higher. For investors, this suggests that the representation premix is shifting toward higher-value SKUs, which whitethorn assistance support beardown margins passim this cycle.

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Micron's caller plan triumph connected AMD's Instinct MI300 level further shows that HBM is much than conscionable a gamble; it's a business.

Micron (MU) made $37.38 cardinal successful gross successful fiscal 2025, which is astir 49% much than the twelvemonth before. Net income was $8.54 cardinal nether GAAP and $9.47 cardinal connected a non-GAAP basis; the information helps exemplify the grade of request for endeavor representation and AI-related products. That emergence successful profits is intriguing, peculiarly erstwhile you see however the institution is focusing connected less products.

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The steadfast generated $3.8 cardinal successful escaped currency travel for the twelvemonth and had $10.1 cardinal successful currency and marketable securities astatine year-end. This gave it the state to support investing successful AI infrastructure without having to unreserved to the indebtedness markets.

Micron didn't specify however overmuch Crucial contributed to its apical line, but experts judge that user DRAM and SSDs relationship for a tiny fraction of full sales. The company's determination distant from that marketplace whitethorn not importantly interaction sales, but it could person a important effect connected gross profits.

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