Micron could become bigger than Tesla under new AI-driven valuation forecast

Micron Technology surged to a record intraday high after UBS sharply raised its valuation forecast for the US memory chipmaker, betting that the global artificial intelligence boom has fundamentally changed the semiconductor industry’s demand outlook.

The brokerage lifted its price target on Micron to $1,625 from $535, implying an upside of roughly 115% from the stock’s previous close of $751. According to Bloomberg calculations cited in market reports, that valuation would place Micron’s market capitalisation near $1.8 trillion, potentially making it larger than Tesla, Meta Platforms and Berkshire Hathaway.

The rally reflects growing investor confidence that AI infrastructure spending is no longer limited to graphics processors and computing hardware, but is increasingly driving structural demand for memory chips used in large-scale AI systems and data centres.

Shares of Micron rose more than 10% in early trading on Tuesday, marking the company’s 30th intraday all-time high of the year. The broader Philadelphia Semiconductor Index also touched a fresh intraday record as investors continued pouring into AI-linked semiconductor stocks.

AI changes the memory chip narrative

For years, Micron traded as a cyclical semiconductor stock heavily exposed to fluctuations in DRAM and NAND pricing. Investors historically viewed memory manufacturers as vulnerable to oversupply, sharp pricing declines and volatile earnings cycles.

However, UBS analyst Timothy Arcuri said the rise of AI has started changing that dynamic by creating more stable long-term demand visibility across the memory market.

According to UBS, expanding AI infrastructure investments are improving confidence around future demand for high-bandwidth memory and advanced storage products required for training and operating AI models.

The brokerage said investors may now begin assigning Micron a more “normal” valuation multiple typically reserved for companies with more predictable growth profiles.

The shift is significant because memory chips are becoming increasingly central to AI workloads that require massive amounts of data processing and storage capacity.

Semiconductor rally widens beyond Nvidia

Micron’s gains also reinforced a broader rally across the global semiconductor sector as investors continued repositioning portfolios around AI-related growth.

Several major chip companies traded higher alongside Micron, including:

• Advanced Micro Devices
• Qualcomm
• Marvell Technology
• Lam Research
• ON Semiconductor
• Wolfspeed

Marvell entered the week with 10 consecutive weekly gains, while Micron and the Philadelphia Semiconductor Index have each advanced in seven of the last eight weeks.

The semiconductor rally has increasingly widened beyond companies directly linked to AI accelerators, reflecting expectations that AI spending will support demand across the wider chip supply chain, including networking, storage, fabrication equipment and memory technologies.

Valuation target reshapes market expectations

The size of UBS’s forecast has also shifted broader market discussions around Micron’s future positioning within the technology sector.

At the proposed valuation level, Micron would rank among the largest listed companies in the United States, behind firms such as Nvidia, Microsoft, Apple, Amazon, Alphabet and Broadcom.

The target reflects how aggressively Wall Street is reassessing companies seen as critical to AI infrastructure buildouts.

While Nvidia has dominated investor attention during the AI rally, analysts increasingly view memory suppliers as essential beneficiaries of expanding AI adoption because advanced AI systems require significantly more memory capacity than traditional computing environments.

Investors watch sustainability of AI demand

Despite the optimism, market observers continue monitoring whether AI-driven semiconductor demand can sustain current valuations across the sector.

Micron’s stock has already recorded a sharp run-up this year, and analysts noted that maintaining momentum above the $800 level may become an important technical indicator for investors watching whether the rally can continue.

The latest surge nevertheless highlights how artificial intelligence is reshaping not just technology products, but the valuation models investors apply across the semiconductor industry.

As AI infrastructure spending accelerates globally, companies once viewed as cyclical component suppliers are increasingly being repositioned as long-term strategic technology players.