Investment in AI infrastructure continues to heat up, driving strong demand for high-performance memory chips. Fueled by new production capacity coming online and bullish sentiment on Wall Street, Micron’s stock has recently reached a historical high, boosting the broader semiconductor sector.
Virginia factory fully operational
Micron announced this week that its new DRAM factory in Manassas, Virginia, has entered full operation. With an investment of approximately $2 billion, the facility primarily produces 1-alpha DRAM for applications in automotive, aerospace, defense, networking equipment, industrial systems, and medical devices.
This facility is also part of Micron’s $200 billion U.S. manufacturing and R&D initiative. Company leadership says the new site will expand domestic advanced storage capacity in the U.S. and support customers requiring long-lifecycle storage products.
UBS significantly raises its target price
Another factor driving further upward momentum in the stock price is UBS’s recent upgrade of Micron’s rating. According to the report, UBS raised Micron’s target price from $535 to $1,625, making it one of the most aggressive upgrades in the semiconductor sector this year.
UBS analyst Timothy Arcuri believes that the supply shortage for memory chips may last at least until the second quarter of 2028. If this assessment holds, Micron’s bargaining power in long-term customer contracts could strengthen, and its profit volatility may be lower than in the past.
Driven by this expectation, market interest in memory chip companies has significantly increased. During Tuesday’s trading session, the semiconductor ETF also rose more than 4%.
Demand for AI has already been reflected in performance.
From a performance perspective, Micron’s recent growth has begun to reflect the demand surge driven by AI. For the quarter ended February 26, the company’s revenue reached $24 billion, nearly doubling year-over-year; adjusted net profit rose to $14 billion, nearly eight times that of the same period last year.
The report notes that over the past year, Micron's stock has surged more than 861%. In addition to companies like NVIDIA and AMD, memory chip manufacturers have also become a focal point in this AI-driven trading cycle.
Future market focus will remain on whether AI-related spending can continue to stay high, and whether the tight supply and rising prices of memory chips will persist.