Micron (MU) Stock Rockets Toward $1 Trillion After Massive UBS Upgrade

TLDR

• UBS raised its Micron price target more than threefold to $1,625 from $535
• MU stock jumped around 14% on Tuesday, pushing its market cap toward $846.93 billion
• UBS cites long-term supply agreements covering up to 30% of DDR volumes industry-wide
• Hyperscalers have locked in 60–70% of server DDR5 volumes under enhanced deals
• UBS revised EPS estimates to $155, $167, and $117 for 2027, 2028, and 2029 respectively

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Micron Technology (MU) stock surged around 14% on Tuesday after UBS more than tripled its price target on the memory chip maker, sending the stock toward a market cap just shy of $1 trillion.

Micron Technology, Inc., MU

UBS analyst Timothy Arcuri raised the price target to $1,625 from $535 — the highest among the 46 brokerages covering the stock. The previous close was $751. By early trading Tuesday, MU was up roughly 14.2%.

The move implies a potential valuation of close to $1.8 trillion over the next twelve months, compared to a market cap of $846.93 billion at Friday’s close.

The core of UBS’s thesis isn’t just AI demand. It’s the structural shift toward long-term supply agreements across the memory industry.

Up to 30% of DDR volumes industry-wide are set to be locked in at pricing slightly below current levels under contracts spanning three to five years. These deals carry fixed volume commitments and partially fixed pricing frameworks.

Hyperscalers Locking In Supply

Hyperscalers have already secured approximately 60% to 70% of industry server DDR5 volumes under these enhanced agreements. That gives Micron guaranteed offtake on a large portion of its highest-value product.

UBS said hyperscalers are increasingly willing to trade pricing flexibility for long-term supply assurance. That shift is what underpins the contracts and helps reduce the kind of pricing swings that have historically made Micron’s earnings hard to model.

The brokerage added there was “no reason” Micron should trade much differently from Nvidia on a price-to-earnings basis as long-term agreements reshape its earnings profile.

Currently, MU trades at just 8.42 times expected earnings over the next 12 months. That compares to 21.1 for the S&P 500 and 24.66 for the Nasdaq 100 — a gap UBS thinks will narrow.

Revised Earnings Estimates

UBS raised its EPS estimates to $155, $167, and $117 for calendar years 2027, 2028, and 2029 respectively — up sharply from prior estimates of $133, $122, and $77.

The firm expects Micron to generate over $400 billion in free cash flow across that period. Even assuming a moderate memory downcycle in 2029, UBS expects EPS to remain “comfortably above $100 throughout.”

The $1,625 price target is based on approximately 15 times next-twelve-months price-to-earnings.

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