Micron stock jumps 14.2% after UBS lifts target to $1,625

Micron Technology shares rose 14.2 per cent on Tuesday after UBS lifted its price target to $1,625 from $535, a call that pushed the memory-chip maker close to a $1 trillion market value and gave fresh momentum to the view that AI demand could change how Micron is valued.

In Sherwood News’s account of the note, UBS analyst Timothy Arcuri said Micron’s earnings power was still being underestimated even after the stock’s run. He argued that more of the company’s future demand is being tied to longer-term supply agreements, which gives investors more visibility on revenue and margins than Micron has usually offered.

That matters because Micron has long traded as a cyclical memory producer. When supply catches up and prices soften, the stock’s multiple tends to contract quickly. UBS is arguing that the market should give more credit to demand from AI servers, where the memory content per machine is rising and customers are committing further ahead.

Sherwood said UBS’s case came down to two points: Micron’s profit potential is still being priced too conservatively, and those profits deserve a higher multiple because a bigger share of demand is already spoken for. For investors, the practical question is whether Micron still belongs in the old boom-bust bucket or has started to move into a different part of the semiconductor trade.

UBS’s new target implies roughly $1.8 trillion in equity value if the stock gets there, according to Reuters. Reuters also said Micron was trading at 8.42 times forward earnings before the re-rating UBS is pushing, a valuation gap Arcuri says no longer fits a company that sits deeper in the AI supply chain.

Arcuri told clients, as quoted by Sherwood News, that “We believe the market will start to put a more ‘normal’ multiple on the stock.” Tuesday’s move suggested investors were at least willing to test that argument.

Why UBS invoked Nvidia

Arcuri also wrote there was “no reason Micron should trade much differently from Nvidia on a price-to-earnings basis,” Reuters reported. UBS was not arguing that Micron and Nvidia sell the same product set. The comparison was narrower: whether the market now sees memory as a harder-to-replace part of AI system spending, and one that deserves a valuation closer to other AI winners.

If that view holds, Micron stops trading only on the next turn in spot memory prices.

The higher target also raises the burden on Micron’s next set of results and management commentary. A richer multiple is easier to defend if demand for high-performance memory stays tight, customer commitments hold and margins remain firm as output rises. If those signals wobble, the new valuation case becomes harder to sustain because UBS has moved the debate from whether earnings rise to how much investors should pay for them.

Micron is already among the semiconductor names most closely watched on Wall Street, with 46 brokerages covering the stock, Reuters said. Tuesday’s jump showed that some investors are ready to back the re-rating story now. The harder step is proving that AI memory demand is not just strong, but durable enough to narrow Micron’s valuation gap with the sector’s most expensive names.