Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTJohn Ballard, The Motley FoolSat, July 4, 2026 at 12:21 PM GMT+2 4 min readMicron Technology (NASDAQ: MU) stock has rocketed more than 755% in the past year. Memory chips are now one of the biggest, if not the biggest, bottlenecks in the artificial intelligence (AI) build-out. This has boosted memory prices and sent Micron's earnings soaring.The stock's forward earnings multiple of 14 is expensive relative to Micron's historical trading range, where it usually trades at under 10 times forward earnings. But this higher valuation could still be attractive if the company can avoid past boom-and-bust cycles and deliver more sustainable growth. Management has a promising strategy to solve it.Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »Image source: The Motley Fool.Memory has become vital to the AI build-outMicron's latest results for the fiscal 2026 third quarter underscore just how strategically important memory has become. Revenue climbed 346% year over year, reaching $41 billion, while earnings per share more than doubled to $24.67. Management expects revenue to reach $50 billion in the current quarter. Gross margin guidance also points to a slight increase to roughly 86%, as memory demand continues to outpace supply.Every AI system is powered by graphics processing units (GPUs), central processing units (CPUs), and application-specific integrated circuits (ASICs), and these chips all rely on high-performance memory in their architectures. As a result, Micron now expects tight supply conditions to persist beyond calendar 2027.Micron is locking customers into long-term purchase agreementsThis outlook has boosted investor confidence that Micron can produce sustained earnings growth for at least the next few years. The more complicated question is what happens to memory pricing after 2027, when increases in supply and normalizing demand could trigger the next downturn.On that front, Micron is working to reduce pricing volatility through longer-term customer commitments. During the earnings call, the company highlighted progress on 16 Strategic Customer Agreements (SCAs) -- take-or-pay contracts spanning 2026 through 2030. These are binding commitments for customers to purchase specified volumes, helping Micron lock in demand and improve planning. Management expects at least half of the company's revenue to come from SCAs once the full set of deals is completed.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info