Morgan Stanley resets Micron stock price target on strong AI demand

Wall Street is getting much bullish connected Micron Technology, and for bully reason. The representation spot elephantine conscionable wrapped up a 4th that near analysts scrambling to revise their outlooks upward. 

Morgan Stanley lifted its terms people connected Micron (MU) banal to $1,200 from $1,050, keeping its "Overweight" standing intact.

It reflects a cardinal displacement successful however the thoroughfare sees Micron's concern implicit the adjacent respective years.

Morgan Stanley cites woody momentum and durable marketplace conditions

According to Investing.com:

• Morgan Stanley expert Joseph Moore pointed to respective reasons for his renewed confidence. 

• Capital spending increases from Micron were described arsenic measured and not excessive. 

• More importantly, the disclosure astir semipermanent proviso agreements blew past expectations. 

Micron confirmed it has present signed 16 strategical lawsuit agreements, oregon SCAs, with a premix of 4 precise ample customers, 3 mid-sized customers, and 9 smaller automotive-focused ones. 

Most of these deals tally 5 years, with automotive agreements acceptable astatine 3 years. Together, they relationship for astir 20% of Micron's DRAM measurement and astir one-third of its NAND flash volume, with commitments extending done 2030. 

Related: Navellier explains wherefore Micron is amended than SpaceX

Fourteen of the 16 deals correspond astatine slightest $100 cardinal successful full gross obligations, and absorption expects existent revenues to transcend those floors, per Investing.com.

Pricing nether these agreements either operates astatine a fixed complaint oregon wrong a acceptable ceiling and floor.

At the ceiling, prices are astir successful enactment with their level successful the 2nd calendar 4th of 2025. 

On the floor, Micron inactive earns a gross borderline good supra its anterior peak. That is meaningful extortion successful an manufacture known for brutal terms cycles.

Chief Business Officer Sumit Sadana said connected the company's fiscal third-quarter 2026 net call. 

"These strategical lawsuit agreements cannot beryllium canceled. There is nary proviso successful this statement to let a lawsuit to locomotion away."

Customers person besides backed these commitments with upfront currency deposits.

The 16 agreements truthful acold transportation a combined $22 cardinal successful full fiscal commitments, of which astir $18 cardinal is cash, Sadana noted connected the call.

Micron's financials archer a beardown story

Micron's full revenues deed $37.4 cardinal successful fiscal twelvemonth ending August 2025, up astir 49% from the anterior year. In the past 12 months (LTM), it has risen by 167% to $90.3 billion.

Gross nett borderline expanded to astir 39.8% successful August 2025 and has surged to 72.6% connected a last-twelve-months basis. The operating borderline connected an LTM ground is 65.6%.