Micron Stock: Let's Talk About Those Long-Term Contracts

Micron (MU) just reported blockbuster Q3 earnings. Revenue surged 4x year-over-year, earnings per share jumped 15x, and gross margins hit a massive 84.6%. The reasons are straightforward: an unprecedented AI buildout has driven explosive demand and pricing for high-bandwidth memory that sits alongside AI accelerators from the likes of Nvidia (NVDA) and AMD (AMD), with the supply crunch spilling into the broader memory market, too.

And now the three dominant suppliers are committing staggering capital to build new capacity, simultaneously, right now.

It should. This is exactly how every DRAM bust has started. There is always a narrative given for why this time is different. The outcome, so far, has always been the same. The latest narrative is that long-term customer contracts will tame the memory industry's boom-and-bust cycle. However, there are important questions worth asking.

For decades, DRAM has followed a brutally predictable script. Demand surges. Suppliers race to build. New fabs come online simultaneously. Supply floods the market, prices collapse, margins go down deeply, and the industry spends years nursing losses before demand recovers.

Now look at the numbers. Sam

Fuente original: Yahoo Finance (https://finance.yahoo.com/markets/stocks/articles/micron-stock-lets-talk-those-140937833.html)