Micron is nearing a market value that few companies have achieved. On Tuesday, its shares rose 17% to $875.22, just short of the $886.74 needed for a $1 trillion market cap. The surge was fueled by a presidential endorsement and the most optimistic analyst price target on Wall Street. Here is what caused the jump and whether the valuation is sustainable.
At a rally in Suffern, New York on Friday, President Trump praised Micron for its commitment to U.S. manufacturing. Micron plans to invest up to $100 billion over 20 years to build the country’s largest semiconductor factory in Clay, New York, just north of Syracuse. Construction began earlier this year, and production is set to start in 2030. Overall, Micron’s investment plan totals $200 billion for U.S. memory manufacturing and research as it competes with South Korean companies SK Hynix and Samsung to meet growing AI-related memory demand.
UBS raised its price target for Micron to $1,625 from $535, keeping a Buy rating and setting the highest target on Wall Street. This target is based on 15 times the firm’s 2029 earnings per share forecast, which the analyst says best reflects Micron’s long-term earnings power under supply agreements. The main idea is that AI is causing a major shift in the memory market, and UBS expects up to 30% of double-data rate memory hardware will soon be sold under long-term pricing agreements at slightly lower than current market rates.
Even after this big rally, Micron trades at a forward price-to-earnings ratio of only 8.4, which reflects the memory chip industry’s history of boom-and-bust cycles. UBS believes that as more information comes out about how AI is changing the memory market, investors will start to value the stock with a more typical multiple. Micron’s stock is up 163% this year and 704% over the past twelve months through Friday’s close.
On Tuesday, SK Hynix shares rose 5.7% and Samsung’s increased by 2.2% in local trading. Last week, Samsung’s management and union leaders reached a tentative agreement on bonus pay, averting a strike that could have disrupted global memory supply. The deal still needs to be approved by workers.
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