Surprisingly, Micron technology (MU 1.27%) The stock recorded a disappointing performance on the stock market in 2024. It only posted an increase of 20%, despite delivering solid results in recent quarters that indicate excellent top and bottom line growth for the company.

Shares of the storage specialist have fallen 27% since hitting a 52-week high in mid-June. However, it won’t be surprising to see the stock’s fortunes change after Micron reports its fiscal first quarter 2025 results on December 18.

Let’s see why that might be.

Micron Technology’s upcoming results could beat expectations

Micron Technology is known for producing memory chips for both computing and storage. This market has historically been cyclical in nature and is dependent on demand for personal computers (PCs) and smartphones. This explains why the global storage market fell nearly 39% last year, according to Gartner estimates, driven by a 4.4% decline in shipments of PCs, smartphones and tablets.

In 2022, the decline in device shipments was more significant, with a decline of 11.9%. Not surprisingly, Micron’s financial performance suffered in 2022 and 2023.

MU sales data (TTM) from YCharts.

However, the storage industry is in transition this year. It is driven by catalysts such as artificial intelligence (AI), which is leading to a surge in memory consumption in several areas such as data centers, smartphones and PCs. For example, the use of high-bandwidth memory (HBM) in AI chips has increased incredibly quickly, such as Nvidia have integrated this type of memory to make their AI accelerators more powerful.

Nvidia’s latest Blackwell B200 GPU comes with 192 gigabytes (GB) of HBM, which is a big improvement over the previous-generation H100’s 96GB and the H200’s 144GB. This factor could contribute to Micron delivering better results than expected. Because when Nvidia released its latest quarterly results last month, management pointed out that Blackwell production was ramping up faster than expected.

Nvidia notes that the company is on track to “exceed our previous multi-billion dollar Blackwell revenue estimate as our transparency around the offering continues to increase.” This is good news for Micron, as the chipmaker has already shipped its HBM chips to Nvidia. Stronger Blackwell demand could help it exceed market expectations. Catalysts like HBM also explain why the global storage market is expected to generate $163 billion in revenue this year, up significantly from $92 billion last year.

Micron also appears to be able to provide impressive forecasts. That’s because the size of the storage market is expected to grow to $204 billion in 2025. HBM will of course play a central role in the growth of this market. Micron expects this particular type of chip to generate $25 billion in sales next year, up from $4 billion in 2023.

At the same time, new catalysts such as the upcoming PC refresh cycle and smartphone market growth could give Micron additional momentum. IDC estimates that the global PC market could see 4.3% growth in 2025, after stagnation this year. Meanwhile, global smartphone sales are expected to grow in the low single digits next year.

The combination of these factors should ensure that the storage market remains in good shape in 2025. That should be enough to help Micron maintain the impressive growth momentum the company has gained in recent quarters.

The enormous growth and attractive valuation make buying the stock a no-brainer

Analysts expect Micron’s revenue to rise 84% year over year to $8.71 billion in the first quarter of fiscal 2025. Earnings of $1.77 per share are expected, compared to a loss of $0.95 per share in the year-ago quarter. These numbers are well within Micron’s guidance range. We’ve already seen that stronger demand from companies like Nvidia could help Micron beat consensus expectations and that this could send the stock higher following its earnings report.

At the same time, Micron is expected to report outstanding revenue growth of 52% to $38 billion in fiscal 2025, while earnings are expected to rise to $8.78 per share from $1.30 per share in the previous fiscal year becomes.

Finally, Micron’s incredibly cheap valuation means investors are currently getting an incredible deal on the stock. The chipmaker trades at just 12 times expected earnings, and Yahoo! Finance notes that the price-to-earnings-growth (PEG) ratio is just 0.17 based on the five-year estimated earnings growth rate.

A PEG ratio of less than 1 means a stock is undervalued in terms of expected growth. This makes Micron a top growth stock that investors can consider buying as it is expected to continue rising this month and into next year.