Micron: 35% of revenue through 2030 already locked in

Micron's position stems from how the memory-chip industry behaved before the AI build-out. Memory products are priced like commodities, and in normal times manufacturers compete on price with low margins, leaving little cash to fund capacity expansion. As a result, when AI demand sent memory orders through the roof, the industry had little spare capacity, and Micron and its peers sold all the memory they could produce this year.

The company is now using that squeeze to change its business model. Rather than leaving pricing to short-term market demand, Micron is starting to sign long-term supply agreements that set price floors and ceilings on a share of its chip sales and guarantee volumes across multiple years. Because these are take-or-pay agreements, Micron's revenue is practically locked in, which the company says should give investors more confidence that it will be less affected by a demand downturn than in prior cycles.

Even with new production facilities coming online starting in mid-2027, management expects the memory market to remain tighter in 2027 and 2028 than in 2026, which should keep chip prices high as supply increases. This outlook, combined with the locked-in revenue, could eventually lead the market to award Micron a higher price-to-earnings ratio closer to where tech companies normally trade.