Credit: this is my take on Micron Just Revealed the Next 2 Big AI Investment Opportunities from Milk Road Stocks. It is an excerpt of an earlier conversation about Micron’s earnings, which the channel re-aired. I checked the company numbers against Micron’s own materials. Not financial advice.

The pitch#

Memory stocks have always traded at a discount because the business swings hard. Prices spike, everyone builds capacity, supply catches up, and profits collapse. The Milk Road Stocks analysts argue Micron’s latest results break that pattern because of long-term supply contracts.

On the company’s call on September 30, Micron said it has signed 26 Strategic Customer Agreements. All of them are take-or-pay. Micron estimates they cover more than 35% of its revenue through 2030. Three quarters of that revenue has a defined pricing framework, mostly with a floor and a ceiling. The rest is priced off the market.

Customers are also paying to lock in supply. Micron says commitments from customers across those agreements rose to $32 billion, most of it as cash deposits. Some agreements now run into 2031. Micron also reports about $150 billion of remaining performance obligations, and says that figure is based on committed volumes at minimum pricing. Even at floor prices, management said it expects margins well above any earlier cycle peak.

Why supply cannot catch up quickly#

The video leans on the point that you cannot add memory capacity on demand. Micron’s own timeline backs that up:

  • Its first Idaho fab starts wafer output in mid-2027, and the second in late 2028.
  • The Japan DRAM expansion starts output in late 2028.
  • A new Singapore NAND plant starts in the second half of 2028.
  • The first New York fab is not expected to produce wafers until 2030.

Management said it expects supply and demand to be much tighter in fiscal 2027 and 2028 than in 2026. Fiscal Q4 revenue was $54.2 billion, and it guided to $61.5 billion for the next quarter.

The analysts also point to second-order plays: the equipment makers who sell tools to those new fabs, and SanDisk on the NAND side. That is their idea, and I have not verified it.

The part that still worries me#

Contracts protect revenue only as long as customers can keep paying. A large share of AI spending is financed with debt, and the cost of that debt moved the wrong way this fall. The Fed raised rates by a quarter point in mid-September, its first increase in three years. The 10-year Treasury yield hit about 5.25% on September 28, the highest since 2007. Oil has been trading around $90 to $105 depending on the benchmark, with the Iran war driving the inflation story, and markets were pricing roughly a two-in-three chance of another hike in October at the time.

The Milk Road Stocks view is that this macro backdrop explains why even strong AI names are under pressure despite good earnings. I agree with that framing. Better visibility lowers the risk that Micron’s profits vanish in a normal memory downturn. It does not remove the risk that the whole AI build-out slows because money gets expensive.

How I would use this#

Treat the contract numbers as the bull case’s floor, not a guarantee. Watch two things: whether customers keep adding deposits, and whether the 10-year yield and the October Fed decision push AI capex plans down. If deposits keep growing while rates rise, the contracts are doing their job. If new agreements stop appearing, the cycle argument is back on the table.

Source video: Milk Road Stocks, Micron Just Revealed the Next 2 Big AI Investment Opportunities. Company figures: Micron fiscal Q4 2026 results and the earnings call transcript.