Micron Technology stock has plenty left in the tank after its nearly-600% gain in the past 12 months. That's the view from UBS analyst Timothy Arcuri as he looks ahead to the memory-chip company's earnings next week.

Micron shares were down 1.8% at $1,053.02 in early trading Thursday. However, shares have risen more than sixfold in the past year on booming memory demand amid the artificial-intelligence race.

UBS's Arcuri reiterated his target price of $1,625 and a Buy rating on the stock in a research note Wednesday. The target is based on a forward price-to-earnings multiple of eight times applied to his forecast of the company's 2029 earnings.

"While the stock remains a battleground between momentum and duration, fundamentals continue to improve with our latest round of checks pointing to a gap between supply and demand that continues to widen," Arcuri wrote.

The immediate drivers are well-known-the need for memory in AI servers is pushing prices higher every quarter. Arcuri forecasts Micron will report fiscal fourth-quarter revenue of $52.4 billion on Sept. 30, and earnings per share of $32.50, beating the company's guidance.

Looking further ahead, the UBS analyst argued Micron's earnings per share will be supported by share buybacks. Micron is currently restricted from carrying out big share buybacks or special dividends due to conditions of the Chips Act funding it received from the U.S. government back in 2024. However, the restrictions on share buybacks should expire on Dec. 9 of this year.

Arcuri said Micron could start by buying back about $20 billion worth of shares a quarter, rising to around $50 billion quarterly toward the end of its fiscal year 2027, which would be September next year.

Notably, Arcuri argued that even were open-market prices of memory chips to fall 80% when the current AI-driven cycle ends-which the UBS analyst argues will begin in the second half of 2028-then Micron is still set to be reporting annualized earnings higher than its current level. That's due to stock buybacks and long-term pricing agreements.

Barron's previously argued Micron could double in price, when it was trading around $1,100.