Key Takeaways
- On May 26, Micron momentarily surpassed a $1 trillion valuation following UBS’s dramatic price target increase to $1,625 — the most bullish forecast among 46 covering analysts.
- The stock surged 17.4% that session, extending gains to over 220% this year and more than 830% across the trailing twelve months.
- Second fiscal quarter sales nearly tripled to reach $23.86 billion, while adjusted earnings per share of $12.20 significantly exceeded the $9.19 Street estimate.
- The company’s entire 2026 allocation of HBM (high-bandwidth memory) has been reserved, with fourth-generation HBM4 chips now rolling off production lines for Nvidia’s Vera Rubin architecture.
- Analyst consensus stands firmly at “Strong Buy,” with experts pointing to constrained AI memory availability that may extend into 2027.
Micron achieved a remarkable benchmark on May 26 when its valuation briefly touched the $1 trillion threshold. Shares rocketed 17.4% to close at $881.60, after peaking with a 19.3% intraday surge, following UBS’s decision to nearly triple its price objective from $535 to $1,625.
This target now stands as the most aggressive among all 46 Wall Street firms tracking the semiconductor manufacturer.
The explosive move represents the culmination of an extraordinary rally. Shares have climbed more than 220% since January and have skyrocketed over 830% during the past year, fueled by impressive financial results, constrained inventory, and accelerating demand for AI-focused memory solutions.
Earnings Performance Driving the Momentum
Micron’s second fiscal quarter delivered results that fundamentally altered the investment narrative. Sales nearly tripled on an annual basis, reaching $23.86 billion versus $8.05 billion in the prior-year period. Net earnings totaled $13.79 billion, translating to $12.07 per share, a dramatic increase from $1.58 billion twelve months earlier.
Adjusted earnings of $12.20 per share crushed the analyst consensus estimate of $9.19 by a substantial margin. Gross profitability reached approximately 75%, demonstrating the exceptional pricing leverage Micron currently commands in this upcycle.
Adjusted free cash flow registered $6.9 billion for the quarter. The company closed the period holding $16.7 billion in cash and marketable securities.
Looking ahead to Q3, management projected revenue of $33.5 billion — significantly above the $24.29 billion Street expectation at that time — alongside adjusted EPS guidance of $19.15.
Chief Executive Sanjay Mehrotra noted the company “set new records across revenue, gross margin, EPS, and free cash flow” during Q2, while anticipating additional records in the current quarter.
Wall Street’s Bullish Thesis
Mizuho analysts conducted meetings with Micron leadership on May 26 and maintained their Outperform rating, keeping an $800 price objective intact. Analyst Vijay Rakesh highlighted that HBM and DRAM demand stems primarily from AI workloads, noting that available supply for major customers remains 30% to 50% below actual demand levels.
Mizuho further suggested this supply-demand imbalance may continue past 2026, projecting that HBM4 and HBM4e pricing could climb between 70% and 100% during 2027 after a pricing adjustment in late 2025.
Micron has completely allocated its 2026 HBM production capacity. Manufacturing of HBM4 products is currently underway for Nvidia’s Vera Rubin computing platform, which reinforces analyst confidence in sustained pricing strength.
Beyond Mizuho’s analysis, D.A. Davidson launched coverage with a Buy rating and $1,500 target, while Morgan Stanley and KeyBanc have similarly expressed positive views. The consensus rating across Wall Street is “Strong Buy,” with the mean price target of $1,625 suggesting approximately 76% appreciation potential from current trading levels.
Supporting the robust demand outlook, Micron recently acquired Powerchip’s Tongluo manufacturing facility in Taiwan for $1.8 billion and announced plans for a second site. Management also increased fiscal 2026 capital expenditure guidance to exceed $25 billion.
Not all analysts dismiss potential headwinds. Some warn that incoming capacity additions could pressure memory pricing during 2027 and 2028, reminding investors that Micron remains fundamentally cyclical despite the transformative AI trend reshaping its business model.
Micron currently trades at approximately 8.4x forward earnings, compared to 22x for the S&P 500 and 26x for the Nasdaq 100.
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