Micron Surges Past $1T Valuation as UBS Lifts Target to $1,625

Micron Technology MU jumped 19% on May 26 after reporting fiscal Q2 earnings that crushed consensus and receiving a major analyst upgrade. The stock hit $1 trillion in market capitalization for the first time. Revenue surged 196% year-over-year to $23.9 billion, while earnings per share soared to $12.20 from $1.56. The rally reflects strong demand for memory chips from AI infrastructure buildouts.

Earnings Crush Triggers Historic Rally

Micron reported fiscal Q2 earnings that far exceeded expectations. The company posted EPS of $12.20 versus consensus of $8.65, a 41% beat. Revenue reached $23.9 billion, up 196% year-over-year. Operating margin expanded dramatically to 67.6% from 22% in the prior year. The stock closed at $928.41, up 3.6% on May 27 after the initial 19% jump on May 26.

UBS Sees Path to $1,625 Per Share

UBS raised its price target to $1,625, implying 75% upside from current levels. The upgrade was driven by long-term supply agreements being signed by memory suppliers to fuel AI implementation. Analysts expect Micron earnings per share to exceed $100 annually. Mizuho also raised its target to $1,150 on strong memory demand. The consensus rating stands at Buy, with 73 analysts recommending the stock.

Strong Guidance Points to Continued Growth

Micron guided Q3 revenue to $33.5 billion with an 81% gross margin, signaling continued momentum. The company began producing advanced 1-alpha DRAM at its Manassas, Virginia facility, which will produce DDR4 and LP4 memory products. A $2 billion expansion project in Virginia aims to quadruple the facility’s production capacity. The Nasdaq 100 crossed 30,000 for the first time on the strength of Micron’s results.

Valuation Concerns Emerge Amid Rally

The stock trades at a PE ratio of 43.73 and a price-to-sales ratio of 17.96, elevated by historical standards. Meyka rates the stock B+ with a Buy recommendation, citing strong fundamentals and growth prospects. The RSI sits at 76.30, indicating overbought conditions. Technical indicators show a strong uptrend with ADX at 35.87, but momentum may face near-term headwinds. Year-to-date, the stock has gained 225%, up 863% over the past 12 months.

Final Thoughts

Micron’s earnings beat and $1 trillion valuation mark a milestone in the AI chip cycle. With UBS targeting $1,625 and Meyka rating the stock B+ Buy, the data supports further gains, though elevated valuations warrant caution on timing.

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