What Happened?
Shares of memory chips maker Micron (NASDAQ: MU) jumped 2.8% in the afternoon session after it continued a rally sparked by a major price target upgrade from UBS.
The stock surged 19.29% in the previous session after UBS analyst Timothy Arcuri raised his price target on the company to $1,625 from $535, a new high among Wall Street firms. The upgrade reflects growing confidence that soaring demand for artificial intelligence (AI) is fundamentally changing the memory-chip industry.
UBS noted that the boom in AI has created a shortage of the high-speed memory chips Micron produces, a situation expected to last until at least 2028. This allows Micron to secure favorable prices through long-term agreements, shifting its perception from a commodity chipmaker to a key player in AI infrastructure.
After the initial pop, the shares cooled down to $925.68, up 3.3% from the previous close.
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What Is The Market Telling Us
Micron’s shares are extremely volatile and have had 49 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 16.8% on the news that UBS analyst Timothy Arcuri tripled his price target to $1,625 from $535, sending the stock past the $1 trillion valuation mark for the first time and making it the most bullish call on Wall Street.
Arcuri's note re-framed Micron as an "AI-native infrastructure giant" rather than a cyclical memory maker, arguing that long-term supply agreements which already covered 60–70% of industry server DDR5 volumes gave the business Nvidia-like earnings visibility through 2029. UBS modeled EPS of $155, $167 and $117 for calendar 2027–29 (up from $133/$122/$77) and over $400 billion in cumulative free cash flow over the period.
The new target is based on a ~15x NTM multiple, with Arcuri writing he sees "no reason why MU should trade a whole lot differently than NVDA." CEO Sanjay Mehrotra called memory supply "structural scarcity," with Micron able to fulfil only 50–67% of HBM and DRAM demand.
Micron is up 194% since the beginning of the year, and at $925.68 per share, it has set a new 52-week high. Investors who bought $1,000 worth of Micron’s shares 5 years ago would now be looking at an investment worth $11,034.
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