May 2025 will be remembered as the month memory chips crashed through a barrier no one saw coming: within days, Samsung, Micron, and SK Hynix each breached the $1 trillion market-cap mark. Samsung got there first on May 6, Micron followed with a 19% single-day surge—its fifth-best trading session ever—and SK Hynix completed the trifecta the next day. The synchrony is no accident. All three are riding the same wave: hyperscalers are devouring DRAM and NAND for AI data centres faster than the industry can possibly produce it.
But Micron’s journey to the trillion-dollar club rests on something deeper than a cyclical upswing. The Boise-based chipmaker has been quietly rewriting its playbook, swapping traditional short-term contracts for multi-year volume commitments that cover roughly 30% of global DRAM output. Under these agreements, both quantities and, in some cases, prices are locked in. Timothy Arcuri at UBS argues this marks a fundamental transformation: Micron is evolving from a volatile commodity producer into a stable, long-term supplier of AI infrastructure. He raised his twelve-month target from $535 to $1,625—implying a valuation near $1.8 trillion, and forecasting that earnings per share could exceed $100 by 2029 even in a moderate economic slowdown.
That view found an echo at Barclays, where analyst Tom O’Malley more than quadrupled his target from $275 in December to $1,175. His reasoning mirrors Arcuri’s: the new contract structure improves revenue visibility in an industry notorious for boom-and-bust cycles. Barclays sees the mismatch between supply and demand persisting into 2027. Even after the rally, Micron trades at a price-to-earnings ratio below ten on forward estimates—hardly frothy for a company that just posted some of the most staggering numbers in semiconductor history.
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Those numbers landed with Micron’s fiscal second-quarter report. Revenue surged 196% year on year to $23.86 billion, while adjusted earnings per share came in at $12.20, crushing the consensus estimate of $8.65. For the current quarter, the company guided for revenue of $33.5 billion and a gross margin of 81%. The engine behind that margin expansion is high-bandwidth memory (HBM), the specialised chips that have become the bottleneck for AI accelerators. Micron confirmed that its entire HBM capacity for 2026 is already sold out.
The stock reacted accordingly, touching a new 52-week high of €808 on Thursday—a gain of roughly 850% over the past twelve months. That puts the company’s market capitalisation just north of $1 trillion, a milestone that seemed unthinkable when the shares were trading at €83.25 last year.
The industry-wide shortages show no sign of easing. Analysts expect DRAM prices to climb 125% in 2026, while NAND prices could jump 234%, with relief for the latter not expected until late 2027. Goldman Sachs sees the consequences rippling beyond the chip sector: the bank raised its year-end S&P 500 target to 8,000, arguing that AI infrastructure companies—led by Nvidia and Micron—will contribute roughly half of all index earnings growth this year. Micron plans to invest more than $25 billion in capacity this fiscal year alone, but with demand outstripping supply by such a wide margin, the trillion-dollar club may have to make room for even bigger numbers.
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