Micron $MU stock breaks through $880 to hit an all-time high! UBS calls for a rise to $1,625: AI long-term contracts provide protection, DRAM shortage may last until 2028

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Is Micron's stock price about to blast off to the universe? Benefiting from the explosive demand for AI memory, UBS today (26th) released a wildly bullish report, raising Micron's (MU) target price from $535 in one shot to an unprecedented $1,625, setting the current highest record on Wall Street. The analyst exclaimed "this time is different," pointing out that long-term contracts from cloud giants have completely changed the cyclical fate of the memory industry, forecasting that the shortage wave will continue all the way through 2028. (Recap: Charging $25,000 per day, two former fund managers conquer Wall Street with AI financial training) (Background: Google and Meta researchers jointly call out: AI Agent security is not a model problem, it's a system problem) Driven by the AI frenzy, memory giant Micron Technology (MU) is welcoming an epic super cycle, and Wall Street's imagination for its valuation has been completely unleashed. Today (May 26, 2026), well-known UBS analyst Timothy Arcuri released the most aggressively bullish report on the market recently. He announced raising Micron Technology's target price substantially from the original $535 to $1,625, maintaining a "Buy" rating. This figure not only represents more than double the upside from Micron's previous trading day (May 22) closing price of $751, but also directly sets the current highest call on Wall Street. Perhaps stimulated by this wildly bullish report, Micron's stock price surged in today's US pre-market and early trading sessions, with the price quickly breaking through the $880 mark, hitting a record high. In the past, the memory industry has always been regarded as a typical "cyclical stock," easily falling into the quagmire of oversupply after capacity expansion (Boom-bust). However, UBS boldly declared in the report that under the structural changes brought by AI, "this time really is different." The analyst pointed out that in order to secure computing infrastructure for AI servers, Hyperscalers have successively signed long-term supply agreements (LTAs) with major manufacturers like Micron. These contracts directly lock in 30% of the industry's DDR capacity, as well as 60% to 70% of server DDR5 supply. This unprecedented long-term contract binding provides Micron with extremely high price and demand visibility. Even more astonishing is the expected timeline of supply-demand imbalance. UBS extended the DRAM shortage expectation from the end of 2027 to the second quarter of 2028; the NAND flash memory shortage will also continue until the end of 2027. Meanwhile, the year-on-year growth forecast for the average selling price (ASP) of the hottest HBM (High Bandwidth Memory) was also substantially raised from 35% to 50%. Based on strong order visibility, UBS substantially revised upward Micron's earnings per share (EPS) expectations for the coming years: - 2027 EPS: Raised to $155 (original forecast was $133). - 2028 EPS: Forecast to reach $167. - 2029 EPS: Forecast to be $117. UBS expects Micron to maintain "triple-digit" EPS through 2029, with cumulative free cash flow exceeding a staggering $400 billion. Therefore, the analyst gave it a P/E valuation of approximately 15 times its 2029 forecast EPS (discounted forward one year), believing that Micron should enjoy the high P/E treatment of an "AI growth stock" like NVIDIA, rather than the low-multiple valuation of a traditional memory manufacturer. Looking back at Micron's stock price performance, its gains in 2026 (YTD) have exceeded 200%, and the cumulative gains over the past year have approached a crazy 800%. However, despite UBS's extreme optimism, market investors still need to maintain a degree of sobriety. Micron's current trailing P/E is approximately 35 times, and although the forward P/E is only about 7 to 8 times, the risk of severe short-term volatility in the stock price should not be underestimated. In addition, if industry peers over-expand capacity in the coming years leading to a supply-demand reversal, or if geopolitical turmoil (such as the Taiwan Strait situation) occurs, both could become potential variables for this super cycle. The market will closely watch Micron's next quarterly earnings report released at the end of June to verify whether this wave of AI memory frenzy is as unbreakable as expected.

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Published:2026-05-26 13:58:22

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