STOCKS | Micron Says Fixed-Price Supply Contracts May Account for About 40% of Revenue

Micron said that once all supply agreements are completed, contracts signed at fixed prices or with price caps near current levels are expected to account for about 40% of its revenue. According to Jin10, the company said these contracts also include price floors, which it said would push gross margin “well above” the peak levels seen in any prior cycle. Futurum Chief Market Strategist Shay Boloor said the figure supports the idea of a memory “supercycle,” but added that he would not permanently value Micron based only on an annualized peak gross margin. He said the appropriate interpretation is not that cyclicality has disappeared, but that Micron’s normalized profitability level may have risen significantly, and that the next downturn could be more protective than investors previously expected.