Micron reached a $1 trillion market cap for the first time on Tuesday as shares jumped 18% amid the heavy demand for its memory chips — thanks to AI. The stock surge came after UBS nearly tripled its price target on the stock from $535 to $1,625 a share, citing long-term agreement opportunities with partially fixed pricing.
“We believe the market will start to put a more ‘normal’ multiple on the stock and MU will continue to re-rate higher as more details emerge about the structural changes AI has driven to the entire memory complex,” the firm wrote.
According to a CNBC report, the new price target suggests shares could more than double from Friday’s close.
UBS said there was “no reason” Micron should trade much differently from Nvidia
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on a price-to-earnings basis as long-term agreements and AI-driven demand reshape the company’s earnings and visibility. The investment firm added that hyperscalers are increasingly willing to trade pricing flexibility for long-term supply assurance, a shift that underpins the contracts and helps stabilize the sector.
As a result, UBS expects Micron to command a higher valuation multiple, moving closer to other semiconductor peers as investors gain confidence in its longer-term earnings durability.
Micron is among the new chipmakers benefitting from the AI race. Investors are increasingly interested in stocks tied to central processing units and memory, needed to run and process agentic workloads.
The demand for AI has led to a memory shortage, and chipmakers like Micron, SK Hynix, and Samsung are trying to fill it, often hiking prices.
Just a few weeks ago, Micron surpassed a $700 million market valuation and soared into the ranks of most valuable U.S. tech firms.
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Intel is also up more than six-fold and trading at near all-time highs, despite missing the early AI rally. The U.S. chipmaker is now seeing a major turnaround following a major investment from the U.S. government last summer. Other companies like Qualcomm and AMD have also seen major wins.
In March, Micron had announced it plans to build a second manufacturing facility in Taiwan at the Tongluo site it acquired from Powerchip Semiconductor Manufacturing Corp. The company said the new facility will help it expand supply of leading-edge DRAM products including high-bandwidth memory (HBM) to support surging AI demand.