Sophia Windsor
[ Gearbest Technology News]Recently, the stock price of US memory chip manufacturer Micron Technology has risen sharply, closing at US$895.88, an increase of about 19% from the previous trading day. The company's total market value exceeded US$1 trillion for the first time, entering the forefront of global market value.
The sharp rise in stock prices is mainly related to the increase in target prices by investment institutions. Global investment bank UBS believes that AI demand is driving structural changes in the storage industry, and therefore raised Micron's target share price to three times the original level. UBS pointed out in the report that up to 30% of DRAM products may be sold through long-term supply agreements in the future. While this may mean that the company gives up some revenue flexibility in the short term, it could help establish a more stable earnings structure.
UBS also said the market may start to give Micron a valuation multiple closer to normal levels. As the structural changes brought about by AI to the entire storage industry become clearer, the market's repricing of Micron may continue to advance.
Currently, companies with a global market value of more than US$1 trillion are mainly concentrated in the fields of AI and large technology, including Nvidia, Microsoft, Apple, Amazon, Alphabet, Meta, Broadcom and TSMC. Compared with other semiconductor companies, memory chip companies are more affected by industry fluctuations, so their expected price-to-earnings ratios for the next 12 months are usually at relatively low levels.
Among memory chip companies, Samsung Electronics became the first Korean company to enter the US$1 trillion market capitalization camp on the 6th of this month. At the same time, SK Hynix is also approaching this threshold. Micron's market value breakthrough is seen as the latest market performance that AI demand continues to spill over to the storage industry chain.
Login with Google