25 June 2026
If you are covering Micron's latest results, please see the following comment from Ben Barringer, head of technology research at Quilter Cheviot:
Micron’s results point to a memory market where demand is clearly running ahead of supply, and that imbalance is lasting longer than expected. Revenues were up 346% with a 17% beat, and guidance is a further 16% ahead, with tightness now seen extending into 2027.
The more interesting shift is structural as Micron is starting to sign long-term agreements with customers, locking in volume and pricing over three to five years. These LTAs effectively put a ceiling and a floor on pricing and commit customers to taking supply, which smooths what has historically been a highly cyclical market. If that approach scales, it supports a more stable earnings profile and a higher valuation multiple.
Similarly, Capex is rising but with an emphasis on discipline. The usual pattern in memory is that higher prices lead to overcapacity and then a sharp correction. The current messaging is about avoiding that outcome, although execution remains key.
There are also constraints from the CHIPS Act. Buybacks are limited for now, reflecting government funding support, but the company expects to resume repurchases from December.
For the wider market, this feeds into the AI supply chain, where memory has been a source of nervousness. Greater supply visibility and continued tightness support pricing across the ecosystem, and this should go some way to abating the recent nervousness around tech.
The combination of rising earnings, constrained supply and early signs of cycle smoothing leaves the stock looking cheap relative to the trajectory of earnings.
