UBS Hikes Micron (MU) Target to $1,625, Spurring $1 Trillion Market Cap Milestone

UBS analyst Timothy Arcuri on May 26 raised Micron Technology’s (MU) price target to $1,625 from $535, driving shares up over 19% pre-market and briefly lifting its market capitalization above $1 trillion for the first time. The upgrade abandons traditional sum-of-the-parts valuation, instead discounting a projected 2029 non-GAAP EPS of about $117 back to $105 by 2028 and applying a 15x multiple. The core assumption: long-term agreements (LTAs) are permanently smoothing memory-industry cycles. UBS argues that “enhanced” LTAs, which lock pricing and volume for three to five years with prepayment clauses, have reshaped demand. Hyperscalers including Microsoft, Google, Amazon and Meta already secure 60–70% of server DDR5 output via such pacts. By 2027, an estimated 20–30% of industry bit shipments will be covered, dampening peak-to-trough price swings by half. Even under a scenario where DRAM spot prices halve, Micron could still earn above $100 a share in 2029, turning a historically cyclical business into one with stable, predictable profits. Nomura has similarly upgraded Samsung and SK Hynix, signaling a broader re-rating as AI supply chains increasingly adopt LTA frameworks.