Micron Technology moves from Watchlist to Buy after fiscal fourth-quarter results released late on 30 September. The probability-weighted fair value rises from $805 to $1,187, about 11% above the pre-results close of $1,065.11. The investment score climbs from 61 to 72.

Q: What did the quarter actually show?

A: A beat on every line. Revenue reached $54.2 billion against guidance of $50 billion plus or minus $1 billion. Non-GAAP gross margin hit 87.0% and EPS came in at $33.42, ahead of a consensus near $31.45. Guidance for fiscal Q1 2027 is $61.5 billion and EPS of $38.15, with sequential revenue growth expected in every quarter of fiscal 2027.

Q: The last report said the margin was a shortage artefact. What changed?

A: The contract book. Micron now has 26 strategic customer agreements with take-or-pay volumes, which management estimates at over 35% of revenue through 2030. Customers have committed $32 billion, mostly cash deposits, and remaining performance obligations stand near $150 billion at minimum prices. Management says more than 75% of 2027 output is already committed. Contracts do not abolish the memory cycle, but they push the risk out a year.

Q: So where does the risk sit now?

A: In fiscal 2028. New capacity in Idaho and Taiwan arrives from mid-2027, with Japan and a second Idaho fab following in late 2028. Capex runs at about $25 billion in the first half of fiscal 2027 alone. On the call, management deflected questions on capital-return targets and on what happens to 2028 pricing if supply catches up. The bear case, weighted at 30%, assumes prices fall about 35% into fiscal 2028 and values the shares near $780.

Q: Is the stock cheap?

A: Moderately. At $1,065 it trades at about 6.7 times base-case fiscal 2027 earnings, so the market already assumes a steep fall after that year. Sell-side targets published since the print run from Goldman Sachs at $1,100 to D.A. Davidson at $2,100.

Q: How should the position be built?

A: Patiently. The closing price predates the results, and after-hours trading barely moved. The plan favours an entry near $1,000 within a $950 to $1,050 range, with a cut-loss at $860 and targets of $1,190 and $1,450. Sizing starts at 1.5% and scales toward 3% once the December quarter confirms the sequential path.

Q: What would reverse the call?

A: A fiscal 2027 quarter that stalls despite the contracts, or customers deferring take-or-pay volumes.

Scenario values, the contract analysis and the full trade plan are set out in the complete Micron Technology (MU) report on our Reports page.