Micron Technology Inc. (NASDAQ: MU) stock soared Tuesday after UBS more than tripled its price target on the memory-chip maker, pointing to a structural shift in the AI memory market. UBS analyst Timothy Arcuri maintained a Buy rating on Micron and raised the firm's price target to $1,625 from $535, implying 116% upside from Friday's close, according to Benzinga Pro.
Arcuri's bullish thesis centers on what UBS described as "enhanced" long-term agreements in the memory market.
Unlike prior offtake agreements that were largely tied to volume, the newer LTAs include extended durations, fixed-volume commitments, and partially fixed pricing.
The agreements, which typically span three to five years, could give Micron a smoother revenue and earnings trajectory, higher cross-cycle return on invested capital and better visibility into committed customer demand.
"The market will begin to apply a more 'normal' multiple to the stock, and Micron will continue to be re-rated higher," Arcuri wrote, according to CNBC.
MU Earnings Estimates
UBS also sharply raised its Micron earnings estimates. The firm now expects earnings per share of $155 in 2027, $167 in 2028 and $117 in 2029, up from prior estimates of $133, $122 and $77.
CNBC reported that UBS expects EPS to remain above $100 through the period, a level the firm sees as evidence of AI-driven structural change in the memory market.
The new target is based on about 15 times next-12-month earnings applied to UBS's calendar 2029 EPS estimate of $117 on a one-year discounted basis, marking a shift away from the firm's prior sum-of-the-parts valuation framework.
Micron stock rose above the key $800 level Tuesday morning, bringing recent analyst targets as the next momentum reference points, including Citi's $840 target and Melius Research's $1,100 target, shown on Benzinga's Micron analyst ratings page.
The bull case is not without risk. Arcuri warned that if demand for high-bandwidth memory chips weakens, Micron could fall to $250, representing roughly 66% downside from Friday's close, according to CNBC.
The Takeaway
For now, UBS has reframed the debate around Micron from a traditional memory-cycle story to a structural AI-demand story.
Tuesday's trading could show whether investors are willing to chase the stock into another leg of its AI-fueled rally.
MU Stock Price Activity: Micronstock was up 13.71% at $853.98 at the time of publication no Tuesday, according to Benzinga Pro data.
Over the past month, MU has gained about 67.3%, versus a 5.3% rise in the S&P 500, and is up roughly 189% year-to-date, compared to the index's 9.6% gain.