Micron Jumps After UBS Backs AI-Driven Revaluation

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Micron Shares Jump on Aggressive UBS Price Target Hike

Micron Technology (NASDAQ:MU) shares advanced 6.3% in premarket trading to $798.37 after UBS issued a bullish call on the stock, lifting its price target to $1,625 from $535. The move implies more than 100% upside from current levels and reflects UBS’s view that new long-term supply arrangements will fundamentally reshape Micron’s earnings dynamics.

In a research note, UBS analyst Timothy Arcuri pointed to a structural shift in how memory is sold across the industry. According to the note, long-term agreements are now widely adopted, with as much as 30% of DDR volumes across the sector expected to be secured under contracts at prices slightly below prevailing market levels.

Shift to Long-Term Contracts Seen Transforming Earnings Profile

UBS described these enhanced contracts as spanning three to five years and incorporating fixed volume commitments alongside partially fixed pricing mechanisms. The firm argued that this framework should allow Micron to prioritize stability over short-term upside.

UBS wrote that Micron will be able to “trade some near-term revenue for demand visibility and a smoother earnings profile,” as the company locks in a significant portion of its output under these longer-dated arrangements.

UBS now forecasts Micron will deliver earnings per share of $155, $167 and $117 for calendar years 2027, 2028 and 2029, respectively, marking a substantial upward revision from prior forecasts of $133, $122 and $77.

The firm also anticipates that Micron will produce more than $400 billion in free cash flow over that three-year span. UBS added that EPS should stay “comfortably >$100 throughout the period” even under the assumption of a moderate memory downturn in 2029.

Valuation Framework and Comparison to NVDA

UBS’s new $1,625 price target is based on approximately 15 times next-twelve-months price-to-earnings. Arcuri noted in the report that he sees “no reason why MU should trade a whole lot differently than NVDA in terms of P/E.”

UBS further highlighted that hyperscale customers have already secured about 60% to 70% of industry server DDR5 volumes under enhanced long-term supply contracts. According to the firm, this provides Micron with assured offtake for a significant share of one of its most strategically important product lines.

Mizuho Reaffirms Bullish View as AI Memory Demand Stays Tight

Separately on Tuesday, Mizuho reiterated its Outperform rating and $800 price target on Micron, maintaining the stock as a Top Pick. The firm underscored its conviction in the demand outlook, stating that “memory remains the AI backbone, with demand outstripping supply through 2026-27E.”

Mizuho analyst Vijay Rakesh wrote, “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.”