Micron 'Buy' Rating Reaffirmed by BofA on Long-Term Supply Deals and Tech Roadmap

Bank of America has maintained its 'buy' rating on Micron Technology (MU) following a series of investor meetings with the company's senior leadership. The firm's positive outlook is based on Micron's strengthening position in memory technology and improved long-term supply visibility extending through 2028.

Long-Term Agreements Provide Stability

In a note to clients, BofA analysts highlighted discussions with Micron's executive team, including COO Manish Bhatia and CFO Mark Murphy, which took place after a company webinar. A key point of discussion was Micron's long-term supply and capacity agreements, which now extend approximately five years beyond 2030, with negotiations for 2031 already in progress.

According to the report, these agreements feature committed bit volumes and financial commitments. Micron management indicated that about 35% of total sales are expected to fall under such agreements, with a strategic target to increase this figure to 50% by 2030. This structure is intended to provide greater revenue predictability in the historically cyclical memory market.

Technology and Capital Return Outlook

Ad

Micron also outlined a detailed technology roadmap, reinforcing its competitive stance in key memory segments. Management commentary suggests current industry specifications are being shaped by memory supply constraints rather than limitations in compute or data center infrastructure.

Key technology milestones discussed include:

• High-Bandwidth Memory (HBM): The company stated it can support configurations from 4-high to 16-high stacks and is developing custom HBM variants for specialized applications.
• DRAM: Following its 1-gamma process, Micron plans four additional planar nodes, with volume production of its 1-delta node targeted for the second half of 2027.
• NAND: The next-generation G11 is set to feature more than 400 layers and double the bit capacity of the G9 generation by the end of 2027.

From a capital allocation perspective, Micron management confirmed plans to increase share repurchases using free cash flow, beginning on December 9. This signals confidence in the company's future cash generation and a commitment to returning value to shareholders.