5 AI Stocks Making Moves on Wall Street: Nvidia, Micron, and More

4. Micron Technology, Inc. (NASDAQ:MU)

Number of Hedge Fund Holders: 154

Micron’s growing base of Strategic Customer Agreements (SCAs) has had Wall Street bullish on the Micron Technology. Recently, on June 25, JPMorgan analyst Harlan Sur raised the price target on the stock to $1,540.00 (from $550.00) while maintaining an “Overweight” rating.

The firm believes that Micron’s expansion from a single 5-year contract, which was announced last quarter, to 16 signed agreements, may offer meaningful protection to its revenues and margins. Instead of operating as a cyclical commodity producer, the company could become a more stable supplier with multi-year contracts.

Commenting on its latest quarterly results, the firm noted how May quarter revenue of 41.5 billion beat Street consensus estimates of $35.6 billion. Meanwhile, gross margins reached an all-time high of 84.9%.

Both DRAM and NAND average selling prices increased 63% and 87% respectively as supply remained structurally constrained. Looking ahead, Micron has guided for an estimated $50 billion in August quarter revenue. While the rate of price increase is expected to slow down, the firm believes that MU’s already achieved prices will likely remain stable due to the SCA structure.

Critically, the 14 of 16 SCAs with defined price bands collectively represent ~$100B of cumulative revenue at floor pricing (i.e. minimum committed), with mgmt explicit that the floor-price gross margins are “well above peak margins in any past cycle” (vs. last cycle peak GM of ~62%), effectively establishing a higher and more durable margin floor than at any time in MU’s history. Customer commitment is also reflected in $22B of cash deposits and related financial commitments (of which $18B is unrestricted cash; ~$10B to be received in F4Q26 alone), which sit on MU’s B/S during the contract term.

Micron Technology, Inc. (NASDAQ:MU) develops and sells memory and storage products for data centers, mobile devices, and various industries worldwide.