Micron Technology shares were surging back toward $1,000 early Friday. Wall Street is confident the memory-chip maker has further to go.

Micron stock was up 2.8% at $976.38 in premarket trading. That was set to add to a 12% gain in the past month, although it remains short of its late June peak of more than $1,200.

Investors are flocking back into the memory trade after the upbeat long-term forecast laid out by Sandisk this week. American depositary receipts of South Korean memory-chip company SK Hynix were gaining 1.4% in premarket trading.

The key factor is that memory prices are expected to keep surging. KeyBanc forecasts dynamic random-access memory $(DRAM)$ prices will rise 15%-20% in the third quarter of this year from the previous quarter, and a further 15% in the fourth quarter. NAND flash memory prices are set to rise 30%-40% in the third quarter and a further 15% in the fourth quarter.

The stock now trades at a forward price-to-earnings ratio of 6.3 times according to FactSet, still well short of other chip peers. Valuing Micron is tricky because cyclical earnings distort traditional price-to-earnings snapshots. However, UBS analyst Timothy Arcuri this week set a $1,625 price target on the stock, based on a forward multiple of 11 times his forecast for the company's earnings in 2029.

"We anchor on C2029E EPS as we believe it best reflects Micron's through-cycle earnings power under LTAs [long-term agreements] because, by that point, our model assumes a moderate memory downcycle," Arcuri wrote.

Barron's previously argued Micron could double in price, when it was trading around above $1,100. Wall Street analysts have an average target price of $1,549 on Micron shares according to FactSet.