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Micron Technology (NASDAQ:MU) has been one of Wall Street’s standout performers in 2025 and continues to be a worthy consideration for any UK investor’s ISA. The Boise, Idaho-based semiconductor group may not attract the same headlines as Nvidia or AMD, but it plays a critical role in powering the artificial intelligence (AI) boom.
With shares already hitting record highs, investors might assume the opportunity has passed. But when looking at both growth potential and valuation, Micron still looks surprisingly attractive, in my opinion.
A hidden bottleneck
Most people think AI is all about graphics processing units (GPUs), but that’s only half the story. Powerful processors need equally powerful memory to work effectively. Without enough high-bandwidth memory (HBM), these GPUs can’t reach their full potential. This is a challenge often described as the “memory wall”.
Micron is one of just a handful of companies that can manufacture HBM at scale, and its latest HBM3E chips are already being used in Nvidia’s Blackwell GPUs and AMD’s MI350X series.
That effectively makes it a critical supplier to the two giants that dominate AI infrastructure. Demand is so strong that Micron’s entire HBM output for 2025 is already sold out, with customer negotiations for 2026 underway.
The company’s also preparing to launch HBM4, which will deliver a 60% bandwidth boost over today’s chips while cutting power use by 20%. With data centres facing soaring energy costs, this efficiency could be a major selling point.
Inference: another growth driver
Training large AI models grabs headlines, but inference — the process of running those models in production — is where memory really matters. Each time users query a system like ChatGPT, the model’s parameters must be loaded and accessed at high speed. Multiply that across millions of daily users and the memory requirements become enormous.
This shift plays directly into Micron’s strengths. Industry forecasts suggest the HBM market could grow from $35bn this year to $130bn by 2033, according to Bloomberg Intelligence. That’s a compound annual growth rate of over 40%. With margins on HBM stronger than traditional dynamic random-access memory (DRAM), that should drive both revenue growth and profitability.
Valuation still undemanding
Despite the rally, it doesn’t look expensive compared to its peers. Its forward price-to-earnings (P/E) sits at just 19.6, well below the semiconductor sector median of 24.7. This falls to 12.6 times for 2026 — that’s very appealing for this sector.
More telling is its forward price-to-earnings-to-growth (PEG) ratio — a measure of valuation adjusted for growth. Here, Micron scores just 0.22 versus an industry median of 1.85. It’s slightly warped by surging earnings, but it’s still a very good sign.
Backing this up is a solid balance sheet, Micron carries modest net debt and generated $4.6bn in operating cash flow last quarter alone. Yet the stock trades at barely 11 times forward cash flow. That’s a steep discount to the sector’s 18.9.
The bottom line
It won’t be without risks. Semiconductor markets are notoriously cyclical, and any slowdown in AI investment could weigh on demand. That would likely result in Micron shares really pulling back.
However, with HBM demand locked in for the next year and growth prospects tied to the long-term shift toward inference, Micron’s a stock worth considering.
