Micron Technology (MU) shares surged roughly 14% on Tuesday after UBS analyst Timothy Arcuri more than tripled his price target to $1,625 from $535, the highest on Wall Street. The massive upgrade propelled Micron’s market cap toward $846.93 billion and intensified expectations that the memory chipmaker will soon enter the exclusive $1 trillion club.
Arcuri’s bullish call goes beyond simple AI demand. He highlights a structural shift toward long‑term supply agreements across the DRAM industry. Up to 30% of DDR volumes are set to be locked in under three‑ to five‑year contracts at pricing slightly below current levels, with fixed volume commitments and partially fixed pricing. Hyperscalers, he notes, have already secured 60–70% of server DDR5 volumes through these enhanced deals, giving Micron guaranteed offtake on its highest‑value products.
“There’s no reason Micron should trade much differently from Nvidia on a price‑to‑earnings basis,” UBS wrote, pointing to the smoothing effect of these agreements on once‑notorious earnings swings. Currently, MU trades at just 8.42 times forward earnings, far below the S&P 500 (21.1x) and Nasdaq 100 (24.66x).
UBS dramatically raised EPS estimates to $155, $167, and $117 for calendar years 2027, 2028, and 2029, respectively. It expects Micron to generate over $400 billion in free cash flow across those three years and sees EPS staying “comfortably above $100” even in a moderate 2029 downcycle. The $1,625 target is based on about 15 times next‑twelve‑months earnings.
Separate valuation metrics also underscore how cheap Micron still appears. With a forward P/E of 12.8 (industry average 25), a PEG ratio of just 0.09, and a rule‑of‑40 multiple of 126% (well above the 40% threshold for undervaluation), the stock’s fundamentals point to significant room to run. Fiscal Q2 revenue hit $23.8 billion, up from $8 billion a year earlier, with gross margins of 74.4% and net income of $13.78 billion. Analysts see full‑year revenue rocketing 193% to $109 billion and $172 billion next year.
From a technical perspective, MU is in a powerful uptrend after rallying 155% this year. The stock, trading around $750, is just below the year‑to‑date high of $818. A break above that resistance could send it toward the $900 level, which would push its market cap beyond $1 trillion. However, a drop below $650 would invalidate the bullish outlook.
Separately, Mizuho reiterated its Outperform rating and $800 price target, calling MU a Top Pick. Analyst Vijay Rakesh said “memory remains the AI backbone, with demand outstripping supply through 2026‑27,” adding there is “no clear line of sight on when the supply‑demand imbalance could end.”
