MICRON TECHNOLOGY, INC.

Red flags

• An 81% gross margin after DRAM and NAND ASP gains of roughly 180% and 200% is exceptionally cycle-sensitive; the filing says five-year annual ASP changes ranged from +200% to -50% and past prices fell below manufacturing cost.
• $25 billion of planned capex in the first half of 2027, higher in the second half, sits alongside $10.8 billion of noncancelable commitments and $4.18 billion of property, plant and equipment purchase obligations, increasing downside if AI demand or pricing normalizes.
• $12.75 billion of customer deposits are refundable if minimum purchases are met and nearly all are due back in 2029-2031; the $7 billion of letters of credit are accessible only after specified default or breach events.
• Customer concentration improved but is not irrelevant: one customer represented 17% of 2025 revenue, versus none at or above 10% in 2026; strategic contracts could re-concentrate demand.
• Limited supplier alternatives for qualifying raw materials and equipment, plus dependence on third-party controllers, foundries, assembly and test providers and utilities, leave output exposed even when Micron fabs operate normally.