Micron Stock Soars 26% YTD: Should You Buy More or Book Profits?

Core Viewpoint - Micron Technology, Inc. has experienced a significant stock rally of 26.5% year to date in 2025, driven by AI demand for high-bandwidth memory and strategic partnerships, but faces near-term risks that may warrant profit-taking [1][16]. Group 1: Stock Performance and Market Position - Micron's stock has outperformed major semiconductor players like NVIDIA, AMD, and Broadcom, indicating strong market positioning [1]. - The rally is attributed to positive catalysts in the AI and HBM markets, particularly a partnership with NVIDIA for its GeForce RTX 50 GPUs [3]. - The company plans to open a new HBM advanced packaging facility in Singapore by 2026, aligning with its AI-driven growth strategy [4]. Group 2: Financial Outlook and Margin Concerns - Micron's CFO warned of a decline in third-quarter gross margins by several hundred basis points, surprising analysts who expected stable margins [6]. - Analysts have revised down the Zacks Consensus Estimate for third-quarter EPS from $1.58 to$1.54 and for full-year EPS from $6.90 to$6.83 [9]. - The expected margin contraction is linked to a shift towards lower-priced consumer products and underutilization of NAND production capacity [7]. Group 3: Consumer Demand and Geopolitical Risks - Micron's business remains tied to traditional consumer markets, which are experiencing sluggish demand recovery, particularly in PCs and smartphones [11]. - The Embedded Business Unit saw a 10% sequential revenue decline, with low growth expectations for smartphone and PC sales in 2025 [12]. - Geopolitical tensions, particularly the U.S.-China trade war, pose a significant risk, as approximately 11% of Micron's revenues come from China [14][15].