Micron soars as UBS more than triples price target to $1,625, predicting a near $2 trillion memory juggernaut

UBS analyst Timothy Arcuri more than tripled his price target on Micron to $1,625, predicting the memory chip maker could reach a valuation of nearly $2 trillion. Shares surged 8% in early trading, rising over 780% in the past year, as the AI boom drives demand for memory chips and long-term supply agreements provide profit visibility through 2029. The bullish outlook also lifted peers Sandisk, Western Digital, and Seagate Technology by up to 3.9%.

Micron soars as UBS more than triples price target to $1,625, predicting a near $2 trillion memory juggernaut It’s different this time. That’s the call from UBS analyst Timothy Arcuri, who more than tripled his price target on memory specialist Micron https://robinhood.com/us/en/stocks/MU/?source=sherwood to $1,625 from $535. If his view were realized, the company would be worth north of $1.8 trillion. Shares are surging 8% in early trading, and are up more than 780% over the past year. The AI boom’s brainpower needs to “remember” that is, access the information it’s processing, driving a spike in memory chip prices. Despite Micron going up and to the right for months on end, Arcuri argues that a its future profitability is still underappreciated, and b investors should be willing to pay more for these earnings, because a large chunk of demand is already locked down. Micron’s forward price-to-earnings ratio is about 8.25x versus 20.9x for the S&P 500 as a whole, which is effectively investors’ way of showing they expect the company’s pricing power and runaway profit growth will sour. “We believe the market will start to put a more ‘normal’ multiple on the stock and Micron will continue to re-rate higher as more details emerge about the structural changes AI has driven to the entire memory complex,” he wrote. Long-term purchasing agreements are providing strong visibility to the ample runway for high profits through 2029, per Arcuri, which will help the company avoid its typical boom-bust cycle. These supply pacts “allow Micron to trade some near-term revenue for demand visibility and a smoother earnings profile,” he concluded. The sunny sentiment on Micron is also lifting peers, with Sandisk https://robinhood.com/us/en/stocks/SNDK/?source=sherwood , Western Digital https://robinhood.com/us/en/stocks/WDC/?source=sherwood , and Seagate Technology Holdings https://robinhood.com/us/en/stocks/STX/?source=sherwood all up between 2.8% and 3.9% as of 8:50 a.m. ET.