TLDR
- UBS lifted Micron’s stock price target to $400 from $300 while keeping a Buy rating
- The memory chip maker can only satisfy 50-75% of demand from its biggest customers
- Analysts increased Micron’s 2026 earnings forecast to $45 per share and 2027 to $60 per share
- Micron stock climbed 237% in the past year while trading at a forward P/E of 7.1x
- Alphabet trades at 27.9x forward earnings with over 70% of cloud customers using AI products
Wall Street analysts at UBS increased their price target for Micron Technology to $400 per share. The new target marks a jump from the previous $300 forecast. The investment firm kept its Buy recommendation on the stock.
Timothy Arcuri, an analyst at UBS, made the call after speaking with Micron’s top executives. He met with both the CEO and CFO to discuss market conditions. The updated target price sits 16% higher than Tuesday’s market close.
Micron’s management expects the memory chip cycle to run longer than historical patterns. They credit artificial intelligence infrastructure spending for the extended demand period. Production constraints are preventing the company from filling all customer orders.
The chip maker can currently deliver only half to three-quarters of what its largest customers request. This tight supply situation gives Micron stronger pricing control. UBS adjusted its profit forecasts higher in response to these market dynamics.
Analysts now project Micron will generate $45 in earnings per share during 2026. This represents an increase from their earlier $41 estimate. The 2027 forecast jumped even more, rising to $60 per share from $42.
Memory Chip Demand Growth
Micron posted $13.6 billion in revenue for its fiscal 2026 first quarter. This represented 57% growth compared to the previous year. Earnings per share hit $4.78, climbing 167% year over year.
AI data centers drove much of this revenue increase. The company has already allocated its full 2026 production of high-bandwidth memory chips. These specialized DRAM products are critical for AI processors and servers.
The high-bandwidth memory market is expanding rapidly according to industry forecasts. Market size is expected to triple from $35 billion in 2025 to $100 billion by 2028. Micron holds approximately one-fifth of this growing market segment.
Memory chips have shifted from commodity products to strategic components in AI systems. They directly affect performance in data centers, autonomous vehicles, medical devices, and edge computing. Each successive AI hardware generation requires increased memory capacity and bandwidth.
Alphabet’s AI Revenue Streams
Alphabet offers a different approach to AI investing at a 27.9x forward price-to-earnings ratio. The company has embedded AI capabilities across Search, YouTube, and Google Cloud Platform. Its cloud division ended the third quarter with $155 billion in contracted future revenue.
Google Cloud reports that more than 70% of its customer base now uses AI-powered products and services. The company designs custom Tensor Processing Units that lower infrastructure costs. These specialized chips outperform general-purpose processors in AI workloads.
The company’s platform reaches over 3 billion Android device users each month. YouTube attracts 2.7 billion monthly active users worldwide. This massive user base provides data that improves AI targeting and personalization across advertising products.
Micron has gained 237% over the last 12 months, beating most large technology stocks. The company maintains a forward P/E multiple of just 7.1x despite strong growth metrics. Both Micron and Alphabet represent different strategies for gaining AI market exposure in 2026.
