BofA reiterates Buy on $MU and raises its price target to $1,550, from $1,500

Vivek Arya sees stronger-for-longer memory pricing, driven by AI demand, supply discipline, and strategic customer agreements
Micron now has 16 Strategic Customer Agreements, up from 1 last quarter. These cover five-year terms from around CY26 to CY30
BofA sees these SCAs as reducing the old memory-cycle risk because more revenue becomes tied to pre-agreed supply contracts, not just spot market pricing
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Their 2027 EPS estimate rises to $140.24, while 2028 EPS increases to $145.45
Micron trades at around 7.5x 2027 EPS and 7.2x 2028 EPS, which BofA sees as too cheap if earnings become more durable
They argue Micron could re-rate toward 12–15x P/E, compared with the old historical range of 8–10x, because the business is structurally improving
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BofA sees FCF dollars potentially surging toward $50B, enabling meaningful buybacks after the CHIPS Act anniversary in Dec. 2026
Even assuming $32B in buybacks for FY27, BofA says that would use only around 25% of potential FCF generation
The main risk they see is that elevated memory prices could act as a tax on AI capex, hurting customer demand. They also note that gross margins could peak around the high 80% range before normalizing