By Subrat Patnaik and Ryan Vlastelica, Bloomberg<\/p>\n
Micron Technology Inc.\u2019s market capitalization, which has soared about 840% over the past year, will more than double over the next 12 months, according to at least one analyst.<\/p>\n
UBS Group AG on Tuesday boosted its price target for the Boise, Idaho-based chipmaker to a street high of $1,625, more than 116% above where it closed last week. The target is three times higher than UBS\u2019s previous of $535 and implies a market value of roughly $1.8 trillion.<\/p>\n
That would make it larger than the current market capitalization of companies like Meta Platforms Inc., Tesla Inc. and Berkshire Hathaway Inc.<\/p>\n
Micron Technology\u2019s shares rallied 19% on Tuesday, supported by both the UBS call and after a Huawei Technologies Co. official said the Chinese company had made a potential breakthrough on chip design, causing chip stocks to jump. The surge pushed Micron\u2019s market value past $1 trillion for the first time.<\/p>\n
The day\u2019s rally \u2014 its biggest one-day percentage gain since November 2011 \u2014 was the latest example the stock\u2019s incredible momentum. Micron is up more than 70% in May, putting it on track for its biggest one-month jump since December 1987. The stock has more than tripled this year, adding to a surge of nearly 240% last year.<\/p>\n
\u201cWe believe the market will start to put a more \u201cnormal\u201d multiple on the stock and MU\u2009will continue to re-rate higher as more details emerge about the structural changes AI has driven to the entire memory complex,\u201d UBS analyst Timothy Arcuri wrote in a note.<\/p>\n
While the memory chips business was traditionally cyclical, the massive AI infrastructure build-out cycle has broken the pattern. The enormous amount of data used by artificial intelligence tools in development has created persistent demand for memory chip while supplies have run low.<\/p>\n
\u201cHyperscalers appear increasingly willing to exchange pricing for multi-year supply visibility and greater predictability around future deployment economics,\u201d said Arcuri, who has had a buy rating on Micron\u2019s stock since early 2020.<\/p>\n
The stock has 49 buy-equivalent ratings, five analysts have hold recommendations and no one recommends selling. The average analyst price target sits at $685.82, according to data compiled by Bloomberg. That implies downside of more than 23% from Micron\u2019s Tuesday close.<\/p>\n
(Updates to market close.)<\/p>\n