Elon Musk Just Gave Investors Another Reason to Buy Micron Stock

Elon Musk, the CEO of Tesla and SpaceX, has provided another reason for investors to consider Micron Technology (MU) stock. Musk's recent comments on X (previously Twitter) highlighted Micron's approach to memory pricing, suggesting that it is more reasonable compared to other suppliers who may be being "extortionate." This insight comes as memory supply issues have emerged as a major bottleneck for artificial intelligence (AI) development.

Musk's endorsement of Micron's strategy is significant because it suggests the company is prioritizing long-term relationships with customers, rather than solely maximizing short-term profits during the current semiconductor shortage. This is particularly relevant considering Micron has recently adopted new multiyear strategic customer agreements (SCAs), covering at least 35% of its projected revenue through 2030 and generating $150 billion in remaining performance obligations.

By securing commitments from large enterprises and hyperscalers, Micron gains greater visibility into future demand, enabling more effective planning of manufacturing investments and potentially reducing its exposure to pricing fluctuations. Musk's comments indicate that customers who perceive Micron as treating them fairly during periods of scarcity may be more likely to commit future orders to the company. This customer loyalty could become a competitive advantage for Micron in the long run.

Despite the attractive valuation and strong growth prospects, Wall Street currently expects Micron to generate approximately $176 in earnings per share (EPS) during fiscal 2027. With shares trading around $938 as of this writing, this translates to a forward price-to-earnings (P/E) ratio of about 5.3, indicating a modest multiple for a company benefiting from AI infrastructure tailwinds.

Applying a relatively conservative multiple of 10 times projected earnings suggests a stock price around $1,760, which represents an 87% upside from today's price.