Micron Technology (NASDAQ:MU) is one of this year’s biggest artificial intelligence (AI) success stories. The maker of memory and storage solutions has seen its earnings and price performance skyrocket amid high demand for its products. In the latest quarter, revenue soared a mind-boggling 379% to $54 billion, and the stock price has advanced in the triple digits this year.
In fact, the stock has climbed so much that it even surpassed $1,200 earlier this year. It’s since given back some of the gain and now trades at about $900. This fantastic performance helped the company reach a market capitalization of more than $1 trillion, putting it on par with the “Magnificent Seven” tech stocks, each valued in the trillions of dollars.
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Now, with its stock price hovering just under $1,000, will Micron announce a stock split? Let’s consider the possibilities.
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Memory’s crucial role in AI
First, let’s talk about Micron’s path so far. Though the company opened its doors nearly 50 years ago and has increased revenue over time, revenue truly took off in recent quarters. Memory plays a crucial role in AI from start to finish, meaning it’s necessary for the training of models as well as for the application of AI to real-world situations. This use of AI in the real world may be carried out by AI agents, which consider a problem and then take steps to solve it as a human would in the past.
Agentic AI is where the revenue opportunity really may gain momentum, as memory is needed in an ongoing manner. This could result in growth over time as AI is used by companies and individuals. Many investors are betting on this and have piled into Micron stock, driving it to tremendous gains.
Now, let’s turn our attention to the subject of stock splits. They automatically lower the individual price of each share, but they don’t change the company’s market value or anything fundamental. The process involves offering additional shares to current holders, according to the ratio of the split. So, a person who held one share valued at $1,000, in a 10-for-1 split, would hold 10 shares with the same value following the operation.
The motive for such a move is simple: It allows the company to bring its stock to a broader range of potential investors. Some investors can’t afford to invest $1,000 and don’t have access to fractional shares — so a stock split gives them the ability to get in on this player that was previously out of reach.
