Key Takeaways:
Micron Technology shares surged 7% in premarket trading Tuesday after UBS more than tripled its price target to $1,625, the highest on Wall Street.
"The emergence of long-term supply agreements across the memory sector will structurally transform Micron's earnings profile," analyst Timothy Arcuri wrote in a note, reiterating a buy rating.
Arcuri raised his price objective from $535, implying a market capitalization of about $1.8 trillion and roughly 104% upside from Micron's premarket level near $798. The analyst boosted his earnings per share estimates to $155 for calendar 2027, $167 for 2028 and $117 for 2029, up from prior forecasts of $133, $122 and $77. UBS projects Micron will generate more than $400 billion in free cash flow over that period.
The upgrade adds to a wave of bullish analyst calls on memory stocks as cloud service providers lock in supply. About 60% to 70% of industry server DDR5 volumes are already secured through three-to-five-year contracts with committed volume guarantees, according to UBS. Mizuho separately reaffirmed its outperform rating and $800 price target on Micron, keeping the stock among its top picks.
President Trump also highlighted Micron during a rally in Suffern, New York, on Friday, calling the company "great" and noting its plan to invest as much as $100 billion over two decades to build the nation's largest semiconductor facility in Clay, New York. Construction began earlier this year, with operations expected to start in 2030.
South Korean memory rivals also gained Tuesday, with SK Hynix rising 5.7% and Samsung adding 2.2% in local trading. Micron has climbed 163% year to date and 704% over the trailing 12 months through Friday's close.
The UBS call signals that Wall Street sees memory chips as the next frontier of AI infrastructure spending, with demand outstripping supply through at least 2027. Investors will watch for further analyst revisions and Micron's next earnings report for confirmation of the long-term contract pricing trajectory.
This article is for informational purposes only and does not constitute investment advice.
