Micron $MU stock price surges past $880 to hit a new all-time high! UBS predicts it will rise to $1,625: AI long-term contracts provide support, DRAM may face shortages until 2028

Micron's stock price is set to skyrocket to the moon? Benefiting from the explosive growth in AI memory demand, UBS (UBS) released an extraordinary report today (26th), raising Micron (MU)'s target price from $535 to an unprecedented $1,625, setting the highest record on Wall Street so far. Analysts are calling "this time is different," pointing out that long-term contracts with cloud giants have thoroughly changed the cyclical fate of the memory industry, with shortages expected to continue through 2028.
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• UBS boldly states "this time is different": bidding farewell to the cycle of boom and bust
• Profit forecast explosion, cash flow expected to reach $400 billion
• Behind a 700% surge in one year: analysts warn of volatility risks

Driven by the AI craze, memory giant Micron Technology (MU) is entering an epic super cycle, and Wall Street’s imagination for its valuation has been thoroughly unleashed.

Today (May 26, 2026), UBS’s well-known analyst Timothy Arcuri released the most aggressive bullish report in recent market history. He announced that Micron’s target price has been sharply raised from the original $535 to $1,625, maintaining a "Buy" rating. This figure not only exceeds Micron’s previous closing price of $751 on May 22 by more than double, but also directly sets the highest bid on Wall Street currently.

Perhaps inspired by this extraordinary report, Micron’s stock price surged before and during the US market open today, quickly breaking through $880, hitting a new all-time high.

UBS boldly states "this time is different": bidding farewell to the cycle of boom and bust

In the past, the memory industry was always seen as a typical "cyclical stock," prone to falling into the boom-bust trap after overexpansion (boom-bust). But UBS boldly declares in its report that under the structural change brought by AI, "this time is truly different."

Analysts point out that large-scale hyperscalers are signing long-term supply contracts (LTAs) with major manufacturers like Micron to ensure AI server computing infrastructure. These contracts directly lock in 30% of the industry’s DDR capacity and up to 60% to 70% of server DDR5 supply. This unprecedented long-term binding provides Micron with extremely high price and demand visibility.

Even more astonishing is the projected timeline for supply-demand imbalance. UBS extends the DRAM shortage forecast from the end of 2027 to the second quarter of 2028; NAND flash memory shortages are expected to persist until the end of 2027. Meanwhile, the average selling price (ASP) of the hottest HBM (High Bandwidth Memory) is also forecasted to increase from a 35% annual growth rate to 50%.

Profit forecast explosion, cash flow expected to reach $400 billion

Based on strong order visibility, UBS has significantly revised upward Micron’s EPS expectations for the coming years:

• 2027 EPS: raised to $155 (from an original estimate of $133).
• 2028 EPS: projected to reach $167.
• 2029 EPS: estimated at $117.

UBS expects Micron to maintain "triple-digit" EPS until 2029, with cumulative free cash flow exceeding an astonishing $400 billion. Therefore, analysts assign a forward P/E ratio of about 15 times the 2029 EPS estimate (discounted one year forward), believing Micron deserves a high P/E multiple similar to NVIDIA’s "AI growth stock" status, rather than the traditional memory manufacturer’s low multiple valuation.

Behind a 700% surge in one year: analysts warn of volatility risks

Looking back at Micron’s stock performance, its year-to-date (YTD) increase has already exceeded 200%, with the cumulative rise over the past year approaching a crazy 800%.

However, despite UBS’s extreme optimism, market investors should remain cautious. Micron’s current trailing P/E ratio is about 35 times, while the forward P/E is only around 7 to 8 times. The short-term volatility risk of the stock price should not be underestimated. Additionally, if overexpansion among peers leads to a supply-demand reversal in the coming years, or geopolitical tensions (such as the Taiwan Strait situation) escalate, these could become potential variables disrupting this super cycle. The market will closely watch Micron’s upcoming Q2 earnings report at the end of June to verify whether this AI memory craze is as resilient as expected.