Micron (MU) AI Stock Analysis

Company Guidance

Management said more than 75% of fiscal year '27 shipments are committed, server units are growing strongly in the high teens, and market conditions are expected to remain tight through '28, with no line of sight to when supply and demand balances; for the balance of fiscal '27, it expects margin expansion relative to Q1 from continued price increases, albeit at a more moderate pace, better mix and strong financial performance. The company has 26 SCA agreements covering both DRAM and NAND, representing 35% of sales by 2030, with DRAM volume a little bit less than that, approximately 35%, and NAND bit volume a little bit more; about 3/4 of SCA revenue has a defined pricing framework and about 1 quarter is open to periodic negotiations or pricing that move with market dynamics. China exposure is expected to be in the single-digit range in fiscal '27, HBM shipments are expected to grow faster than conventional DRAM through 2028, and NAND industry growth is expected to be in the mid-20% range in calendar '27 and '28. First quarter guidance factors in a single-digit sequential bit growth and double-digit for cost for both DRAM and NAND, while excluding the incentive comp effects, the year-over-year R&D increase will be over $1 billion in '27; first wafer output from the Idaho facility is expected mid-calendar '27, and a new clean room will come online in the second half of calendar year '28.