Investing.com – Moody’s Ratings upgraded Micron Technology’s () senior unsecured notes ratings to Baa1 from Baa2 on Thursday. The ratings outlook remains stable.
The upgrade reflects enhanced visibility from recently announced strategic customer agreements and structural shifts in the DRAM and NAND industries, according to Moody’s Ratings Senior Vice President Raj Joshi. Micron expects half or more of its revenue to be covered by take-or-pay commitments in these strategic customer agreements. The larger agreements contain a ceiling price for existing products approximately at second-quarter 2026 levels and a floor price that applies through the terms of the agreements.
Demand related to artificial intelligence computing has substantially expanded the DRAM and NAND markets and created a large category for specialized high-bandwidth memory. Cash balances rose to $30 billion as of the fiscal third quarter ended May 2026, and the company reduced debt by approximately $10 billion over the last 12 months. Outstanding debt was $5.7 billion at fiscal third-quarter 2026.
Moody’s expects Micron’s cash balances to increase to well over $100 billion by fiscal year-end 2027, excluding prepayments from customers related to supply agreements. The firm expects Micron’s revenue to increase to $230 billion in fiscal 2027 from $129 billion in fiscal 2026, and free cash flow to increase to $114 billion from $58 billion over the same period.
Micron’s shareholder returns are capped at modest levels through December 2026 under the Direct Funding Agreement between Micron and the U.S. Department of Commerce. From 2027 through 2029, share repurchases are limited to the amount of free cash flow generated over the preceding 12 months, subject to other conditions.
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