Micron Just Revealed a New Business Strategy. That Change Makes It a Screaming Buy.

MU is pitching a structural change to its business: multi-year contracts with floor and ceiling prices that lock in 35% of revenue through 2030.

The move shifts MU away from spot-market sales, the pricing channel that has made memory chips traditionally cyclical. Contracts with price floors and ceilings narrow the range of outcomes on a large share of revenue. That is a meaningful departure from the boom-and-bust pattern memory investors have long priced in.

The valuation gap is the trade. MU trades at 5.1x forward earnings, while TSM sits at 24x. The Motley Fool article argues that as MU's revenue becomes more predictable, it should look more like a logic chip manufacturer such as TSM, and that the multiple should follow. If the market accepts that comparison, even partial convergence would imply substantial upside from the current 5.1x level.

Interpretation: the 35% figure also means roughly two-thirds of revenue remains outside these contracts. The rerating case depends on investors treating the contracted portion as the new baseline rather than the exception. Price ceilings also cap upside in strong pricing environments, so the stability comes with a trade-off.