Micron price target boosted by UBS as memory “super-cycle” defies norms
Micron Technology Inc (NASDAQ:MU) shares rose more than 7% on Wednesday as UBS raised its price target on the memory chip maker, citing rising pricing and long-term deal potential, as geopolitical tensions in the Middle East eased.
The firm raised its price target on ‘Buy’ rated Micron to $535 from $510; This represents a significant increase from current levels of around $405.
“Despite sentiment on memory turning strongly negative following MU’s gross margin guidance, we continue to believe we are in the midst of a supercycle for the stock that will likely defy traditional analytical norms,” the analysts wrote.
UBS wrote that the latest industry checks point to continued strength in pricing across both DRAM and NAND, with particularly strong momentum in high-bandwidth memory (HBM), a key component used in AI workloads. UBS expects HBM pricing improvements to support margin expansion over time.
It also highlighted growing discussions about long-term supply agreements between memory suppliers and major customers, including hyperscale cloud providers and original equipment manufacturers.
These arrangements are expected to include volume commitments, upfront payments and structured pricing bands, which can increase revenue visibility and reduce earnings volatility.
On NAND, UBS noted that not all suppliers appear equally willing to enter into such agreements, with some preferring to maintain flexibility in the allocation of production capacity.
Still, the general trend suggests that memory companies are increasingly willing to trade upside in the short term for long-term stability in earnings and returns.
UBS added that supply constraints, particularly in DRAM, could extend into 2028, reinforcing the view that current upcycling could be more resilient than previous cycles.
The firm estimates Micron’s earnings per share could reach approximately $135 in 2027 and $120 in 2028; Both are above broader market expectations.
