Micron Stock Surpasses $1 Trillion Market Value for the First Time
Micron Technology (NASDAQ: MU) briefly crossed a $1 trillion market capitalization on Tuesday for the first time in company history, following a highly bullish outlook from UBS, which significantly increased its price target on the memory chip manufacturer.
UBS raised its target price for Micron stock to $1,625 from $535, citing the growing adoption of long-term supply agreements across the memory semiconductor industry. According to the bank, these agreements could fundamentally reshape Micron’s future earnings potential.
Shares of Micron were last trading 17.2% higher at $879.68, after reaching an intraday record high of $891.27. Based on approximately 1.13 billion outstanding shares, the company’s valuation briefly climbed to around $1.01 trillion.
UBS Sees Structural Shift in Micron’s Business Model
In a research note, UBS analyst Timothy Arcuri said long-term agreements have become increasingly common across the memory market.
The bank estimates that up to 30% of global DDR memory volumes could soon be secured under contracts with pricing set slightly below current market levels.
These agreements generally span three to five years, featuring fixed purchase volumes and partially fixed pricing structures. UBS believes this could provide Micron with stronger demand visibility and more stable earnings over time.
The analysts noted that Micron may sacrifice some short-term revenue growth in exchange for a smoother and more predictable financial profile.
UBS Raises Earnings Forecasts Through 2029
UBS sharply increased its earnings expectations for Micron over the coming years.
The bank now projects earnings per share (EPS) of:
- $155 for 2027 (previously $133)
- $167 for 2028 (previously $122)
- $117 for 2029 (previously $77)
In addition, UBS forecasts that Micron could generate more than $400 billion in free cash flow during this period.
The firm expects EPS to remain above $100 annually, even if the memory industry experiences a moderate downturn by 2029.
Why UBS Believes Micron Deserves a Higher Valuation
The new $1,625 price target is based on roughly 15 times forward earnings, a valuation multiple UBS argues should not differ significantly from leading AI chip companies.
Arcuri stated that he sees little reason for Micron to trade at materially lower price-to-earnings multiples than Nvidia, reflecting confidence in Micron’s long-term growth trajectory.
AI Demand Continues to Support Memory Chip Growth
UBS said major cloud providers and hyperscalers have already secured around 60% to 70% of industry server DDR5 memory volumes through long-term agreements.
This gives Micron guaranteed demand for a large portion of its premium memory products at a time when artificial intelligence infrastructure spending remains strong.
Mizuho Also Remains Bullish on Micron Stock
Separately, Mizuho reaffirmed its Outperform rating on Micron and maintained an $800 price target, while continuing to label the stock as a top investment pick.
The firm highlighted persistent demand growth, arguing that memory chips remain essential to AI development.
According to analyst Vijay Rakesh, supply continues to lag behind demand and there is currently little indication of when this imbalance may end.
Mizuho added that DRAM and NAND memory technologies are expected to benefit from long-term secular growth trends driven by artificial intelligence adoption.
Analysts See Long-Term AI Tailwinds Supporting Micron
Growing AI investment, increasing memory requirements and expanding long-term supply agreements are strengthening optimism around Micron’s future performance.
With multiple Wall Street firms raising expectations, investors appear increasingly confident that demand for advanced memory chips could remain elevated well beyond 2026.
