UBS Bullish on Micron (MU): Slaps $400 Price Target as AI Memory Demand Explodes

The AI hardware arms race just found its next ammunition depot. Forget the GPUs for a second—it's the memory that's becoming the real bottleneck, and one analyst firm sees a clear winner emerging from the silicon scramble.

The Memory Gold Rush

UBS isn't whispering; it's shouting from the rooftops with a revised $400 price target for Micron. The rationale cuts straight to the core of the current tech paradigm: artificial intelligence models are insatiable data hogs. They don't just compute; they devour vast, high-bandwidth memory to function. Every incremental leap in AI capability demands a corresponding leap in memory capacity and speed. Micron, sitting at the intersection of DRAM and NAND flash innovation, is positioned to feed the beast.

Beyond the Hype Cycle

This isn't about speculative cloud spending. It's about tangible, immediate demand from hyperscalers and hardware manufacturers who are scrambling to build the infrastructure for the next decade. The supply chain is tightening, and pricing power is shifting back to the manufacturers. The upgrade cycle for data centers, now fueled by AI-specific needs, looks less like a wave and more like a permanent tsunami.

The Street's New Darling

The upgrade signals a broader recognition: AI's economic value chain extends far beyond software and silicon design. The foundational components—the unsung heroes like memory—are critical enablers. When a major bank plants a flag at $400, it's betting that the market has chronically undervalued this segment of the tech stack. It's a play on the essential plumbing of the intelligence revolution.

Of course, on Wall Street, a soaring price target often says more about the fear of missing out than fundamental analysis—nothing gets a banker's heart racing like the chance to justify a bullish call with a trendy acronym. But this time, the silicon doesn't lie. The machines are hungry, and Micron is setting the table.

TLDR

• UBS raised Micron’s price target to $400 from $300, maintaining a Buy rating based on AI-driven memory demand
• Micron can only meet 50% to 75% of customer demand from its largest customers due to supply constraints
• UBS increased 2026 EPS estimate to $45 from $41 and 2027 estimate to $60 from $42
• AI workloads have transformed DRAM from a commodity into a strategic asset that commands premium pricing
• Micron stock has surged 237% over the past 12 months, outperforming most large-cap tech stocks

UBS analyst Timothy Arcuri lifted his price target on Micron Technology to $400 from $300 this week. The firm maintained its Buy rating on the stock.

Micron Technology, Inc., MU

The new target represents a 16% increase from Tuesday’s closing price. UBS made the MOVE after meeting with Micron’s management team, including the CEO and CFO.

Micron executives told the firm they expect the current memory cycle to last longer than previous cycles. They pointed to AI demand as the key driver behind this extended runway.

UBS raised its 2026 earnings per share estimate for Micron to $45 from $41. The firm also increased its 2027 estimate to $60 from $42.

The stock has jumped 237% over the past 12 months. That performance puts Micron ahead of nearly every other large-cap tech name in the market.

Supply Can’t Keep Up With Demand

Arcuri wrote that Micron can currently meet only 50% to 75% of demand from its largest customers. That supply crunch is creating pricing power the company hasn’t seen in years.

AI workloads require massive amounts of DRAM. Customers have stopped treating memory as a cheap, interchangeable part.

Companies now view DRAM as a strategic input. That shift has changed how they plan purchases and lock in long-term supply agreements.

“We still believe investors are underappreciating the degree to which AI has fundamentally made memory, DRAM in particular, a more strategic asset,” Arcuri wrote in his note.

The analyst said each generation of High Bandwidth Memory becomes obsolete faster than traditional DRAM did in the past. This creates a disincentive for customers to stockpile inventory.

That dynamic could reduce the severe price swings that have historically defined the memory market. Customers need to keep buying fresh supply rather than sitting on older chips.

Premium Pricing for Performance

Memory suppliers are now getting paid for performance. That’s a change from the pre-AI era when memory was just another system component.

“Suppliers are now getting paid for best-in-class performance as memory has become a key differentiator within hardware systems,” Arcuri wrote. He pointed to Nvidia’s Blackwell and Blackwell Ultra platforms as examples.

UBS believes the market hasn’t fully priced in DRAM content growth inside AI servers. Micron has told analysts that DRAM offers better value than NAND because it allows more customization and higher product quality.

The pricing environment has improved across the board. Memory makers are capturing more value per chip as customers prioritize performance over cost.

Several other firms have raised their targets on Micron in recent months. Piper Sandler set a $275 target after Micron’s guidance beat Wall Street estimates by 30% on revenue and 75% on earnings per share.

Bernstein raised its target to $330, citing expected DRAM price increases driven by AI data center demand. Needham reiterated a Buy rating with a $300 target, highlighting strong demand for both DRAM and NAND products.

Itau BBA maintained an Outperform rating on the stock. The firm praised Micron’s forward guidance as exceptionally strong.

Micron recently reported financial results that exceeded its own guidance. The company forecast 132% year-over-year growth for the next quarter.