Shares in Micron Technology (MU) exploded higher on Tuesday, pushing the memory chipmaker beyond a $1 trillion market capitalisation (intraday) for the first time as Wall Street doubled down on the view that artificial intelligence is reshaping the economics of the memory industry.
The stock climbed more than 20% during trading and touched a record intraday high of $916.80 after UBS issued the most aggressive price target on the Street, lifting its forecast to $1,625 from $535 while maintaining its buy rating on the shares.
The sharp revision came as UBS argued Micron should no longer be viewed as a cyclical memory producer vulnerable to violent boom-and-bust swings, instead framing the company as a central piece of global AI infrastructure with increasingly predictable earnings.
Analyst Timothy Arcuri said the shift was being driven by long-term supply agreements that lock in both volumes and partially fixed pricing, giving Micron stronger visibility over future revenue while reducing exposure to historic pricing collapses that have long haunted the memory sector.
UBS estimates these agreements already cover between 60% and 70% of industry server DDR5 memory volumes, with hyperscale AI customers increasingly prioritising guaranteed supply over short-term pricing flexibility as demand for advanced memory continues to surge.
The brokerage said there was little reason Micron should trade materially differently from Nvidia on a price-to-earnings basis if the structural changes taking place across the industry continue to hold.
Artificial intelligence infrastructure spending has triggered an aggressive race among cloud giants and data centre operators to secure high bandwidth memory and DRAM chips required for increasingly demanding AI workloads, creating supply shortages that memory manufacturers are struggling to satisfy.
Micron chief executive Sanjay Mehrotra recently indicated the company can currently meet only around half to two-thirds of demand for some of its high bandwidth memory products, reinforcing expectations that constrained supply could support elevated pricing for years rather than quarters.
The rally extended a staggering run for Micron shares, which have already more than tripled this year as investors rotated heavily into semiconductor firms exposed to AI infrastructure spending.
UBS also sharply upgraded its long-term financial forecasts, projecting annual earnings per share above $100 between 2027 and 2029 while forecasting more than $400 billion in cumulative free cash flow across the same period.
The move sent a wave through the wider storage and memory sector. Shares in SanDisk rose around 7%, while Western Digital gained roughly 9% as traders rushed to reprice companies tied to the expanding AI supply chain.
Micron’s ascent also adds to a broader semiconductor rally that has lifted companies once viewed as laggards in the AI race. Intel has surged following its government-backed turnaround efforts, while Advanced Micro Devices, Qualcomm and Marvell Technology have all pushed to fresh highs as investors hunt for the next beneficiaries of the AI buildout.
Despite the historic rally, UBS argued Micron still trades at a discount to major technology peers, noting the stock was valued at roughly 8.4 times forward earnings compared with more than 21 times for the broader S&P 500 and nearly 25 times for the Nasdaq 100.
