BlockBeats news: On June 25, Micron revealed during its earnings call in the early hours that its strategic customer agreements increased from one in the previous quarter to 16, covering approximately 20% of DRAM shipments and about one-third of NAND shipments. Of these, 14 agreements are based on minimum contract prices, with cumulative remaining revenue totaling approximately $100 billion. CEO Sanjay Mehrotra stated that these agreements will "fundamentally transform" the business model. The key takeaway is that the market will reposition Micron from a highly cyclical memory stock to an AI infrastructure provider with greater revenue visibility.
Micron revealed during the earnings call that industry tightness is expected to persist beyond 2027, and even as supply gradually improves in 2028, there is no clear indication of when supply will catch up to demand. Management attributed this to the large scale, complexity, and lengthy timelines involved in building new fabs.
CFO Mark Murphy noted that DRAM revenue increased 343% year-over-year to $31.3 billion, and NAND revenue rose 361% year-over-year to $9.9 billion; DRAM prices rose in the low-60% range, while NAND prices increased in the mid-80% range. He explained that this quarter’s earnings significantly exceeded market expectations primarily due to pricing power and supply-demand imbalances, rather than simply higher shipment volumes.
The company expects capital expenditures of approximately $10 billion this quarter and about $27 billion for the full fiscal year 2026; capital expenditures per quarter in FY2027 are expected to exceed the FYQ4 level, with more than half allocated to cleanroom construction. However, the CFO also noted that free cash flow this quarter is expected to continue to increase significantly.
Overall, the conference call conveyed to the market signals of “ongoing memory shortages, customers willing to sign long-term agreements, and further upside potential in pricing.” This led to MU surging nearly 16% in after-hours trading in the U.S., reaching a new all-time high of $1,213, and driving broad gains across the storage sector.