Micron's stock is one of the best performers in the S&P 500. UBS and Citi expect them to grow by another quarter

Analysts of two banks at once - UBS and Citigroup - have raised the target price of shares of semiconductor manufacturer Micron and now expect their growth by about a quarter. And this is despite the fact that the securities have already risen in price almost 2.5 times this year, which makes them one of the best in the S&P 500 index. They will be able to rise even higher thanks to the lag between supply and demand and the desire of technology giants to secure long-term contracts for the supply of memory chips, analysts believe.

UBS raised its target price on Micron shares to $245 and reiterated its recommendation to buy them (Buy rating), CNBC reports. Citigroup on Thursday increased the target price of securities to $240, also maintaining the Buy rating. Banks' forecast implies growth of quotations by 28% and 25%, respectively, compared to the closing level on October 15.

At trades on October 16, Micron securities soared in the moment by 7.5% - up to $206.34, which became their record for the whole time of their circulation on the stock exchange. Compared to the beginning of 2025, they are now worth about 141% more expensive.

According to UBS, the quotes of the company may grow due to the imbalance between supply and demand, writes CNBC. Analyst Timothy Arcuri pointed to the increasing shortage of RAM chips (DRAM).

"Against such a limited supply backdrop, we expect to see further strengthening of profitability in the core DRAM segment," said Arcuri.

Demand growth, according to the bank, is being driven by both US cloud giants (hyperscalers) and smartphone manufacturers, CNBC reported. However, it is not yet possible to meet the growing needs, as a significant part of DRAM chips is now going to the production of high-performance HBM (High Bandwidth Memory), the analyst wrote.

Citi believes DRAM chips will be the next target for long-term contracts in the "artificial intelligence food chain," MarketWatch reported. According to the bank, Micron can expect deals similar to OpenAI's (creator of ChatGPT) agreements with Nvidia, AMD and Broadcom. Micron could also benefit from "higher and more sustainable" chip prices, which could lift earnings per share above $23 in 2026: that's nearly double the current peak of $12.26 reached in 2018, MarketWatch noted, citing Citi.

This week analysts of several more investment banks revised their forecasts on shares of semiconductor manufacturer Micron Technology. Thus, BNP Paribas changed rating from Underperform ("worse than market") to Outperform ("better than market"). Following it Cantor Fitzgerald raised the target price of Micron shares to $240, confirming the recommendation to buy. According to the bank's estimates, the growth potential of the securities is about 25%.

Micron securities have a total of 42 ratings from analysts, and almost all of them advise buying the stock: 28 ratings Buy and 10 Overweight. Three more recommend to hold (Hold), one - to sell (Underweight). At that, the average target price is $204.17, which is only slightly higher than the current one.

This article was AI-translated and verified by a human editor