Micron Technology (MU) achieved a historic milestone on Tuesday, surpassing $1 trillion in market capitalization for the first time. The stock closed at a record $895.88, a 19.3% gain, after hitting an intraday high of $916.76. The rally extended into premarket trading Wednesday, with shares adding another 5.8% as investors continued to pile into the AI memory trade.
Wall Street's Bullish Call
The surge was triggered by UBS analyst Timothy Arcuri, who raised his price target on Micron to $1,625 from $535—the highest among the 46 brokerages tracked by LSEG. Arcuri sees no reason for Micron to trade at a significant discount to Nvidia on a price-to-earnings basis, given the company's central role in AI infrastructure. The bullish call reflects a broadening of the AI trade beyond processors to memory chips, which are essential for handling the massive data workloads generated by AI models.
Strong Earnings and Guidance
Micron's recent financial results provide solid backing for the optimistic outlook. In fiscal Q2, the company reported revenue of $23.86 billion and non-GAAP earnings per share of $12.20. Looking ahead, management guided for Q3 revenue of $33.5 billion, plus or minus $750 million. CEO Sanjay Mehrotra emphasized that memory has become a strategic asset for customers, driving long-term demand.
AI Memory Demand Drives Growth
The key driver of Micron's success is high-bandwidth memory (HBM), a stacked memory technology that sits next to AI chips to enable rapid data transfer. Reuters reported that Micron's entire 2026 HBM lineup is already sold out, with HBM4 units now entering production. This scarcity has led hyperscale cloud providers to lock in 60% to 70% of DDR5 server memory supplies through long-term contracts, according to Investing.com. Mizuho's Vijay Rakesh maintained his Outperform rating and $800 price target, though he noted uncertainty about when supply and demand will fully balance.
Industry-Wide Momentum
Micron is not alone in its ascent. SK Hynix also reached a $1 trillion market cap on Wednesday, joining Samsung Electronics and Micron as the top memory chipmakers. Memory chip prices doubled in the first quarter and are expected to jump up to 63% this quarter. Mirae Asset analyst Kim Young-gun predicts that supply will not catch up with demand until at least 2028.
Risks and Outlook
Despite the euphoria, the memory market is known for its volatility. A sudden pullback in cloud spending, weaker-than-expected long-term contracts, or accelerated capacity expansion by Samsung and SK Hynix could reverse the supply shortage that has boosted Micron's valuation. The company itself cautions that its outlook is subject to risks that could lead to materially different results.
For now, investors are focused on scarcity. With broader index futures pointing higher, the AI memory trade appears poised to continue. All eyes will be on whether Wednesday's premarket gains hold through regular trading, as Micron faces its next test after Tuesday's record close.
