Shares of Micron Technology Inc (NASDAQ:MU) rallied on Thursday after the company reported upbeat fiscal fourth-quarter results.
Here are some key analyst takeaways:
- RBC Capital Markets analyst Srini Pajjuri reiterated an Outperform rating, while raising the price target from $1,200 to $1,500.
- Needham analyst Quinn Bolton maintained a Buy rating, and raised the price target from $1,550 to $1,650.
- KeyBanc Capital Markets analyst John Vinh reaffirmed an Overweight rating, while taking the price target higher from $600 to $1,600.
- DA Davidson analyst Gil Luria reiterated a Buy rating, while cutting the price target from $1,500 to $2,000.
- JPMorgan analyst Harlan Sur maintained an Overweight rating, while raising the price target from $500 to $1,540.
- Cantor Fitzgerald analyst C.J. Muse reaffirmed an Overweight rating and price target of $1,500.
Check out other analyst stock ratings.
RBC Capital Markets: Micron reported revenue and non-GAAP earnings of $41.5 billion and $25.11 per share. That’s significantly higher than consensus estimates of $35.9 billion and $20.86 per share, respectively. The company generated higher-than-expected gross margins of 84.9%. Pajjuri credited this to continued pricing strength and a favorable product mix.
The company also signed longer-term agreements (SCA) with 16 customers (2 hyperscalers) covering about 25% of the revenue. “Since these SCAs come with floor prices, Micron is likely to generate gross margins "significantly above prior peak levels," he further stated.
Needham: Micron Technology reported its results and guidance well above expectations, Bolton said. The company signed 16 strategic agreements, which should represent 20% of its DRAM volume and 33.3% of NAND volumes through 2030, he added.
Price floors across these contracts could take Micron’s gross margins "well above" its prior peak of 62%, the analyst stated. "Micron does not currently have line of sight to supply/demand parity," he further wrote.
KeyBanc Capital Markets: Micron guided fiscal fourth-quarter revenue at $50.0 billion and earnings at $31.00 per share, higher than consensus estimates of $43.4 billion and $25.59 per share, respectively, Vinh said. "While industry supply will gradually improve in C28, MU does not have line of sight to supply catching demand," he wrote.
The company announced 16 SCAs, representing $100 billion in cumulative revenues, the analyst stated. These 5-year agreements require upfront deposits of $22 billion and will ensure gross margins are well above Micron’s historical peak of 61.4%, he added.
DA Davidson: Micron’s total revenues grew 346% year-on-year to $41.5 billion, topping consensus of $36.3 billion, Luria said. The broad-based beat saw NAND and DRAM revenues outpacing expectations. Data center SSD revenue is growing more than 100% sequentially, he added.
Management’s fourth-quarter revenue guide of $49-$51 billion implies 342% year-on-year growth in the quarter and the company exiting the year with 245% revenue growth, with this "explosive growth" being driven by "unprecedented growth in data centers and insatiable demand for DRAM and NAND," the analyst wrote. These tight conditions are expected to continue beyond 2027 given AI demand trends, he further stated.
JPMorgan: Micron Technology’s results and guidance came in "far ahead" of expectations, Sur said. What was more "meaningful" was the "substantial expansion" of the company’s Strategic Customer Agreements (SCAs) from a single 5-year contract announced in the previous quarter to 16 agreements signed in the latest quarter, he stated.
This is a "step-change" that "fundamentally transforms" Micron’s business model from a "cyclical commodity producer to multi-year contracted supplier with significant downside protection on both revenue and margins," the analyst wrote. The company is poised for a "meaningful capital return inflection" after December 9, 2026, which marks the two-year anniversary of CHIPS Act agreements, and has indicated a 100% return of excess cash to shareholders over time, he further stated.
Cantor Fitzgerald: Micron reported very strong results, against a robust AI compute demand environment, Muse said. The company had been facing a "very tight" DRAM and NAND supply environment, which supported meaningful price hikes, he added.
Management had already indicated that 2027 would be just as tight as 2026, the analyst stated. The new details provided indicate that the new SCAs come with upfront cash, price floors and ceilings, and represent around 40% of total revenues under long-term contract of five-year, he said.
Micron Price Action
Shares of Micron had risen by 12.37% to $ 1,177.50 at the time of publication on Thursday.
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