Micron shares jump after UBS sees massive upside

Shares of Micron Technology climbed 6.3% in premarket trading to $798.37 after UBS sharply raised its price target on the memory chip maker to $1,625 from $535, citing the increasing adoption of long-term supply agreements across the memory industry, News.Az reports, citing Yahoo Finance.

In a research note led by analyst Timothy Arcuri, UBS said long-term agreements have become firmly established across much of the memory-chip sector.

The bank estimates that up to 30% of global DDR memory volumes could soon be tied to pricing agreements set slightly below current market prices.

UBS said these enhanced supply deals, which typically last between three and five years and include fixed-volume commitments alongside partially fixed pricing structures, will allow Micron to “trade some near-term revenue for demand visibility and a smoother earnings profile.”

The bank raised its earnings-per-share forecasts for Micron to $155 for calendar year 2027, $167 for 2028, and $117 for 2029, up from its previous estimates of $133, $122, and $77, respectively.

UBS also projected that Micron could generate more than $400 billion in free cash flow during the same period.

According to the bank, earnings per share are expected to remain “comfortably >$100 throughout the period” even if the memory market experiences a moderate downturn in 2029. The new $1,625 target price is based on approximately 15 times next-12-month earnings.

Arcuri added that he sees “no reason why MU should trade a whole lot differently than NVDA in terms of P/E,” referring to NVIDIA.

UBS said hyperscale cloud providers have already secured roughly 60% to 70% of the industry’s server DDR5 supply through enhanced long-term contracts, giving Micron guaranteed demand for a significant portion of its highest-value products.

Separately on Tuesday, Mizuho Financial Group maintained its Outperform rating and $800 price target on Micron, while continuing to list the company as a Top Pick.

Mizuho highlighted strong confidence in long-term demand trends, saying memory products remain central to the expansion of artificial intelligence infrastructure.

“We believe there’s no clear line of sight on when the supply-demand imbalance could end as demand durability sees secular long-term tailwinds with DRAM/NAND as key AI enablers,” wrote Mizuho analyst Vijay Rakesh.

News.Az 

By Nijat Babayev