Micron 4QFY26: Expecting shortage to sustain into CY28

Micron turns more bullish on the memory cycle and expects supply to become "much tighter" in CY27 and CY28 than in CY26; despite capacity increase, it has no visibility on when the shortage will end due to new customer requests. FQ4 revenue beat on very strong NAND, though OPM missed on higher opex from incentive compensation. Micron reiterated it will return all excess cash to shareholders and increase buyback after Dec 9; SCAs now cover 35% of revenue through 2030 (expected to reach ~50%), with US$150B RPO but only ~20% financially committed, raising questions about enforceability. CY27 HBM supply agreements are largely completed at significantly higher prices, but HBM remains less profitable than conventional DRAM. FY27 net capex is raised to over US$50B. Bernstein maintains Outperform with a price target of US$1,300, implying 22% upside.