Micron’s shares jumped on Tuesday after brokerage firm UBS tripled its price target on the stock to $1,625 from $535 earlier, citing long-term agreement opportunities with partially fixed pricing.
The brokerage believes that the market will start to put a more “normal” multiple on the stock, expecting it to continue to re-rate higher as more details emerge about the structural changes AI has brought about on the entire memory chip complex.UBS’ revised price target sees the stock more than doubling in value over the next 12 months. This, even as the stock has already rallied 184% so far this year, along with its other chipmaking peers like Intel, which also has tripled in value in just the first five months of the year.
Micron is also benefitting from the next stage of the AI chapter as investors are now betting on companies useful in building out this critical infrastructure, rather than those running the theme itself. The demand has triggered a global memory chip shortage, which players like Micron are struggling to fill.
Just earlier this month, Micron had crossed $700 billion in market capitalization.
Shares of Micron were up another 1.6% in extended trading as well.
