Micron's CEO expects memory supply to remain tight through 2028.
Micron's CEO expects memory supply to remain tight through 2028.
Many investors probably feel like they missed out on Micron Technology (MU -5.63%). The memory-chip maker's stock is up about 382% over the past year, outperforming the S&P 500's 16%.
But one reason the stock could still make new highs is simple: more of Micron's future demand is already locked in with strategic customer agreements. On the Sept. 30, 2026, earnings call, CEO Sanjay Mehrotra said, "These multi-year take-or-pay agreements sharpen our long-term supply planning and enhance the durability and predictability of our strong financial performance."
Micron has signed 26 long-term agreements with customers. These agreements will cover more than a third of its revenue through 2030. The take-or-pay structure means customers pay whether or not they take delivery.
A large portion of high bandwidth memory -- the fast memory chips that feed data to AI chips -- is already sold out for 2027. Importantly, Mehrotra said next year's volume is commanding prices "much higher than 2026 prices."
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That visibility shows up in the company's guidance. Micron expects revenue of about $61.5 billion in its current fiscal quarter, up from $54 billion in the previous quarter, with a high gross profit margin of 86%. Management expects fiscal 2027 to be another record year, with revenue growing every quarter.
Memory is a famously boom-and-bust business, and Micron is spending heavily to add capacity, so memory prices could fall if supply catches up with demand. But that's not likely to happen for at least a few more years. Mehrotra expects supply-demand conditions to be even tighter through 2028 than they were in 2026.
Averytin News Financial update.