Semiconductors · #26 in the Retail 100

Micron Technology

Our rating: buymedium conviction
12-month target: $1,119.04 +34.2%
Expected vs. S&P 500: +15.8 ptsSee the math
Next earnings: Dec 16In 41 daysEarnings calls page ↗

Micron's $150B of long-term contracts at minimum prices cover just over a third of its expected revenue through 2030, so most sales still ride memory prices.

Summary

Micron makes memory chips, a business where prices swing with supply and profits swing with them. AI servers now need so much memory that prices have soared, and revenue is nearly five times what it was a year ago. Every past boom ended when new factories opened or customers cut orders, and Micron and its two big rivals are all building again. The stock depends on whether Micron's long contracts can soften the next downturn.

$855.19

+$620.49 (+264.38%)Past year

What Micron Technology does

Micron is one of three companies that make most of the world's DRAM, the memory every computer needs to run. Memory prices swing with supply, and Micron's profits swing with them.^1,2,6,9,26

What it sells

DRAM (working memory)76% of revenue, FY2026
Memory for servers, PCs and phones. Includes HBM, a high-priced stacked version that sits beside AI chips like NVIDIA's.
NAND (storage)24% of revenue, FY2026
Chips that keep data when the power is off, sold as drives to data centers and as chips to phone makers.

Who buys it

AI has made Micron mostly a data center supplier. Data centers bought about 60% of FY2026 sales: cloud companies and AI chip makers like NVIDIA 32%, server makers 28%. Phones and PCs were 27%, cars and factories 12%.

Where you've seen it

Micron chips sit inside phones, PCs and cars from many brands, under the device maker's name rather than Micron's.

The backstory

Memory is a boom-and-bust business: when prices are high every maker builds factories, and prices collapse once that supply arrives. In fiscal 2023, as PC and phone makers sat on excess inventory and cut orders, Micron's revenue halved and it lost $5.8B. Now AI has made memory scarce again, and Micron is using the shortage to lock customers into multi-year contracts with minimum prices.

How the business makes money

Why Micron's profit soars when memory runs short^{1,2,19,22,23,26}

Step 1
AI servers need ever more memory, and new factories take years to build, so supply can't keep up.
Step 2
In a shortage prices rise fast. DRAM prices rose by a high-teens percentage last quarter alone.
Step 3
Micron's costs are mostly fixed, so higher prices go almost straight to profit. It keeps about 87¢ of each $1 after the cost of making chips.
Step 4
Today's profits fund new factories, about $25B planned for the next six months, and rivals are building too. Past booms ended when that new supply arrived.
What shareholders get
Multi-year contracts, where customers pay set minimum prices even if they buy less, aim to soften the next fall. The stock is betting they make this peak last.

Advantages

Multi-year contracts with floor prices

Strong advantage

Micron's best protection against a price collapse, though only partial. Under 26 contracts, customers must pay even if they buy less, mostly at prices with set floors and ceilings.^2,7

Fast-growing data center drives

Strong advantage

Strong and growing fast. Data center drive sales reached nearly $10B last quarter. Micron credits AI systems storing more data and drives replacing hard disks.²

Memory made in the U.S.

Supporting

Useful, but years away. Micron is the only major memory maker producing DRAM in the U.S., and it is building factories in Idaho and New York.²

Custom HBM with NVIDIA

Supporting

Promising but unproven. Micron is working with NVIDIA on NVHBM, a custom HBM: NVIDIA designs the controller, TSMC makes the base chip and Micron stacks the memory.^2,9

What's changing

Record profits, but more factory spending and lost AI-memory share

Micron just finished a record year, with fiscal 2026 revenue of $133B. It forecast another record next quarter and growth in every quarter of fiscal 2027, but most of its new factory space won't be ready until late 2028. In AI memory it is losing ground: Samsung shipped HBM4 first, and Counterpoint estimates Samsung's share of HBM rose sharply this spring while Micron's slipped.^1,2,5,8

Competitors

Who else an investor would consider, and how they compare.

Company	Market value	What it does	Compared with Micron Technology
Micron Technologythis stock	$967.58B	Micron is one of three companies that make most of the world's DRAM, the memory every computer needs to run. Memory prices swing with supply, and Micron's profits swing with them.
SK HynixSKHY	$1.04T	Korean memory maker and NVIDIA's main supplier of HBM, the memory beside AI chips.	SK Hynix leads AI memory, with nearly three times Micron's HBM share.^5,7,11,24
Samsung Electronics (Korea: 005930)private	—	The world's largest memory maker, which also sells phones, TVs and chips for others.	Samsung has far more capacity and mass-produced HBM4 first; Micron is smaller, memory only.^5,6,8
SandiskSNDK	$181.49B	Sells only flash storage, like data center drives, after spinning off from Western Digital.	Sandisk is storage only; Micron makes mostly DRAM, with NAND just 26% of revenue.^2,12
CXMT (ChangXin Memory, China, private)private	—	China's state-backed DRAM maker, adding capacity fast to sell standard memory.	CXMT pushes down standard DRAM prices but is mostly shut out of U.S. AI supply.⁶

Leadership

Who runs the company, and how the stock has done under the CEO.

MU 12xS&P 500 +61.8%Price change since Nov 2021, the earliest data available · log scale

20222023202420252026

Sanjay MehrotraChairman and CEO9.4 yrs, since 2017

Mark MurphyEVP and CFO4.5 yrs

Manish BhatiaPresident and COO2 mo

Scott DeBoerPresident and Chief Technology and Prod…2 mo

Wall Street on Mehrotra: PositiveRosenblatt raised its price target to $1,900 after Micron beat forecasts and raised its outlook, and expects profitability to keep improving through fiscal 2027. DA Davidson cited 26 customer agreements expected to cover over 35% of revenue through 2030.^L5,L6

Leadership sources (6) · researched Oct 2026

L1Micron Technology Form 8-K (appointment of Sanjay Mehrotra as President and CEO) · Micron / SEC, 2017-04-28
L2Chipmaker Micron Taps SanDisk Co-Founder as CEO · Fortune (Reuters), 2017-04-27
L3Micron Appoints Mark Murphy as Executive Vice President and Chief Financial Officer · HPCwire (Micron press release), 2022-04-05
L4Micron Announces Leadership Appointments to Accelerate Innovation and Growth · Micron, 2026-08-26
L5Rosenblatt Lifts Micron's Target to $1,900. The Cash Is There, The Buybacks Aren't Yet. · Yahoo Finance, 2026-10-07
L6This Wall Street Firm Just Put a $3,000 Price Target on Micron Stock · 24/7 Wall St., 2026-10-07

Bull vs. bear: two bets on the same stock

1
A share is a small slice of the company. Its value comes from the profits the company will make in the future.
2
Nobody knows those profits yet. Buyers (bulls) pay today's price betting they'll beat what most people expect. Sellers (bears) bet they'll fall short.
3
When results come in, the price moves toward whichever side was right, and that side makes money.

The question they disagree on

Will this memory boom end in oversupply like past ones, or will about $150B of multi-year contracts keep Micron's earnings steadier?^{2,4,5,6,22,23}

Bull case: why buyers buy

If memory stays as scarce as Micron expects through 2028, prices hold up and contracts with minimum prices keep margins above any past peak.

The shortage is getting worse, not better. Micron expects supply to tighten further in 2027 and 2028 and cannot yet see when it will catch up.
Even the floor prices are very profitable. Micron says its margins at contract minimum prices stay well above the peak of any past cycle.
Customers are putting up money to secure supply. On top of the long contracts, they have committed about $32B, mostly deposits Micron later returns.

Bear case: why sellers sell

Micron and its rivals are all building factories, and when those open, or if AI spending slows, prices could fall on most of Micron's revenue.

Everyone is building at once, as before past busts. Micron plans about $25B of capital spending in the first half of fiscal 2027, while Samsung and SK Hynix expand.
Price increases are slowing. Chinese rival CXMT is winning market share, and management says prices will rise more slowly from here.
Most revenue still floats with market prices. Even within the contracts, a quarter of the revenue is priced at market rates rather than set in advance.

Where Delphi landsbuyWe think the bull case is more likely than today's price assumes.See why

What to watch

The numbers that will settle the debate.

Gross margin▲ improving

87.0% last quarter; about 86.25% expected this quarter.^1,2

Shows where prices are in the cycle. Management says this quarter, hurt by one-time bonus costs, is fiscal 2027's low.

HBM market share▼ worsening

18% in April to June, against 50% for SK Hynix and 33% for Samsung (Counterpoint).^5,2

HBM, the memory beside AI chips, is hardest to replace, so losing share leaves Micron exposed to commodity prices.

Revenue under multi-year contracts▲ improving

About $150B across 26 contracts, covering over 35% of revenue through 2030.²

The more revenue locked in at minimum prices, the less an oversupply can hurt Micron.

Next earnings report

Dec 16

In 41 days

Earnings calls page ↗

Expected earnings per share: $38.22
Expected revenue: —

What to listen for: Whether gross margin holds near 86% or higher, and whether Micron's next forecast still shows revenue rising as price increases slow. Date unconfirmed: estimates run Dec. 16 to 23.^1,2,10

What would prove this wrong

✕DRAM and NAND contract prices stop rising or fall before 2028's new factories open.
✕Micron's HBM share falls below about 15% as rivals win NVIDIA's HBM4 and HBM4E orders.
✕Samsung, SK Hynix, CXMT and Micron factories all start production in 2028, creating oversupply.
✕Cloud providers cut AI spending, or customers renegotiate their multi-year contracts.
✕Gross margin falls below the roughly 86% fiscal Q1 level during fiscal 2027.

Our ratingBuyMedium convictionas of Nov 2 close, $833.59 · what ratings mean

Analysts keep raising forecasts, and at about 9 times its six-year average earnings, just above its five-year median of 8, Micron should beat the S&P 500.

12-month target: $1,119.04 (+34.2%)
S&P 500, same method, with dividends: +18.5%
Expected vs the market: +15.8 points

The math behind the recommendation

Three 12-month price scenarios, weighted by probability, compared with the S&P 500 under the same method.

Now $833.59

Target $1,119.04

bull case30% likely

$1,618.20 +94%

Memory stays scarce through 2028 and contract minimum prices keep the next downturn shallow, so earnings across the cycle settle near the top of analysts' range.

$181.05 mid-cycle earnings per share × 8.9 = $1,618.20

base case50% likely

$1,001.87 +20%

Earnings match analyst forecasts for fiscal 2028 before new factories at Micron, Samsung and SK Hynix push prices down, with contracts softening the fall.

$137.73 mid-cycle earnings per share × 7.3 = $1,001.87

bear case20% likely

$663.21 -20%

Rival factories open at once and prices fall on the majority of revenue without a contract minimum, so fiscal 2028 earnings peak well below forecasts.

$122.70 mid-cycle earnings per share × 5.4 = $663.21

Why these odds: Analysts raised fiscal 2027 estimates 17% in 90 days, to $176, after Micron beat by about 6% and guided above consensus. Heavy factory spending keeps a bear case alive.

How the prices are built: Wall Street expects mid-cycle earnings per share of $137.73 for the year starting a year from now (analysts range from $107.67 to $224.37). Today the stock trades at 7.1 times next year's mid-cycle earnings per share; its five-year middle is 7.9.^{1,2,14,15,16,18,19,20,21,25}

What tests the call: Fiscal Q1 2027 earnings (date unconfirmed): whether gross margin holds near 86% (Dec 16)

Buy means expected to beat the S&P 500 by 10+ points over 12 months; Sell means expected to trail it by 10+. Inputs gathered Oct 5; the recommendation updates with the price every day. Model-generated, not personalized investment advice. How ratings work · Track record

What the price assumes

At $833.59, investors pay less for each dollar of Micron Technology's mid-cycle earnings than for the average stock's

Micron Technology trades at 7.1 times the mid-cycle earnings analysts expect over the next 12 months. That ratio is the multiple: what investors pay today for each dollar of a year's mid-cycle earnings. That is below its five-year middle of 7.9.

Analysts expect mid-cycle earnings to grow about 17% the year after, against about 16% for the S&P 500. The S&P 500 trades at 19 times. At the market's multiple, today's price would only make sense if Micron Technology earned about 62% less than forecast over the next year.

Micron Technology multiple: 7.1×
S&P 500 multiple: 19×
Base case: +20%
Bear case: −20%

The skewOur bear case loses about $1.01 for every $1 our base case makes. That ratio, how much you stand to lose against how much you stand to make, is the skew.

Last earnings

FQ4 2026 results, reported Sep 30

Sixth straight record quarter: revenue up 379% from a year earlier, 87% gross margin, and a forecast about $5B above analysts' estimates.^1,2,3,4,13

Reported Sep 30	Expected	Actual	Difference
Earnings per share	$31.50	$33.42	+6.1%
Revenue	—	—	—

Beat expectations in 6 of the last 6 quarters

Stock reaction: +3% on Oct 1 after a dip in after-hours trading

Why the stock moved

The fiscal Q1 forecast of $61.5B revenue and $38.15 per share beat analysts' estimates of about $56.8B and $36.02.
The stock dipped after hours on higher capital spending (about $25B in the first half) and slower price increases.
The next day, investors focused on about $150B of contracted revenue and 2027 HBM sold at higher prices.
The stock gave back about 2% the next day and ended Oct. 2 about 1% above its pre-earnings close.

What it means for the stock: The near-term outlook improved: Micron says the shortage will get worse, and more revenue is under contract. But higher capital spending and slower price increases suggest the peak is near.