Micron Technology’s stock surged as much as 17% at Tuesday’s market open following a highly bullish note from UBS Group, which cited transformational AI demand for memory chips. UBS analyst Timothy Arcuri more than tripled the firm’s price target on Micron (MU) to a Wall Street-high of $1,625, implying roughly 115% upside. The stock is now up over 202% year-to-date, leading a broader rebound in AI-related equities as the firm argues AI has structurally changed the historically cyclical memory market.
Micron (MU) stock led a chip rally to open the trading week after receiving a bullish call from UBS Group. MU shares soared as much as 17% higher after the opening bell, with the stock now up over 202% year-to-date.
According to UBS analyst Timothy Arcuri, the AI boom has structurally changed the market for memory. Arcuri states that the market should start putting a more “normal” multiple on Micron as investors get more evidence of the changes AI has driven across the memory complex.
UBS argues that AI demand has changed the historical pattern for DRAM and NAND by giving Micron more visibility into demand and a smoother earnings path. Therefore, MU stock could be one of the biggest gainers out of all the AI stocks in the sector.
The firm more than tripled its price target on Micron stock to a Wall Street-high of $1,625. The new target is up from $535 and implies roughly 115% upside from Micron stock’s Friday close of $751.
On another front, Micron DDR4 output is set to quadruple at the company’s Manassas, Virginia facility. This expansion has led investors to question whether the current DDR4 supply shortage is about to lose steam.
Micron commenced its most advanced DDR4-compatible process, 1α DRAM production, at the Virginia site on May 22. The company is treading uncertain waters, yet UBS and other analysts remain bullish on its prospects.
