Why Wall Street thinks US memory maker Micron is the next Nvidia

With the whole tech industry clamoring for more memory, Micron’s delivered blockbuster third-quarter earnings last week. Revenue quadrupled year-over-year to $41.45 billion, and profits skyrocketed from $1.88 billion to $28.2 billion over the same period. Micron also provided a positive outlook, forecasting fourth-quarter revenue of between $49 billion and $51 billion.

And Wall Street, which has been eager to find more public AI-related companies that may do as well as Nvidia, became even more enamored.

The historic problem for memory chip makers like Micron and Samsung is that building out manufacturing facilities to increase capacity is a time-consuming, expensive endeavor. And demand often falls just as companies can increase capacity, creating a glut and subsequent price drop.

Micron got ahead of any AI bust chatter by emphasizing a series of long-term supply agreements, including with Nvidia and AI lab Anthropic, that would presumably protect it. The company said in its earnings presentation that it has signed 16 strategic customer agreements across the data center, consumer, and auto market segments, which it expects to fundamentally transform its business model.

That seemed to convince a number of analysts that this company could be another long-term, profitable investment. In a research note, William Blair tech analyst Sebastien Naji noted demand growth continues to outpace the rate that new cleanroom space can come online.

“Given the strong likelihood of continued ASP growth in the coming quarters and improving revenue visibility thanks to a rapidly expanding set of long-term agreements (SCAs) with key customers, we see potential for more durable earnings growth and reiterate our Outperform rating,” Naji wrote.

Whether Micron really can sustain itself for long-term without a bust cycle remains to be seen. But for a brief moment on Thursday, this U.S. company was more valuable than some of the industry’s giants.