Shares of Micron Technology (NASDAQ: MU) jumped 6% in premarket trading on Tuesday, after Swiss investment bank UBS dramatically raised its price target on the memory chipmaker to $1,625 — more than doubling from its prior target of $535. The stock closed at $751 on Monday. UBS reiterated its Buy rating on the stock.
The bold upgrade reflects UBS’s growing conviction that structural changes driven by artificial intelligence are fundamentally reshaping the memory industry in Micron’s favor.
At the heart of UBS’s bullish thesis is the rapid proliferation of Long-Term Agreements (LTAs) across the memory industry. The bank’s supply chain research indicates that up to 30% of DDR volumes industry-wide are set to be locked in at pricing just slightly below current market levels. According to UBS, these agreements will allow Micron to trade some near-term revenue for greater demand visibility and a smoother earnings profile going forward.
UBS significantly raised its earnings-per-share estimates for Micron across the next several years. The bank now forecasts EPS of $155, $167, and $117 for calendar years 2027, 2028, and 2029, respectively — up sharply from prior estimates of $133, $122, and $77. Crucially, UBS expects Micron’s EPS to remain comfortably above the $100 mark throughout the entire period, a threshold the bank views as emblematic of the durable, structural change AI has introduced to the memory complex.
Over the same timeframe, UBS projects Micron will generate over $400 billion in free cash flow — a figure that underscores the scale of the opportunity the firm sees ahead.
UBS believes the market has yet to fully appreciate the magnitude of the shift underway. The bank argues that as more details emerge about AI’s structural impact on the entire memory complex, the market will begin applying a more “normal” multiple to Micron’s earnings. The new $1,625 price target is based on approximately 15x next-twelve-months price-to-earnings, applied to the bank’s C2029E EPS estimate of $117 on a one-year discounted basis — a methodology shift away from the prior sum-of-the-parts (SoTP) approach.
Tuesday’s premarket move reflects investor enthusiasm for what UBS is framing as a generational inflection point for Micron. If the bank’s projections prove accurate, the memory giant — long viewed as a cyclical, commodity-driven business — may be on the cusp of earning a more premium, growth-oriented valuation from the broader market.
