Driven by robust demand for its memory chips from artificial intelligence applications, Micron Technology's stock surged 18% on Tuesday, propelling the company's market capitalization to exceed $1 trillion for the first time.

The sharp increase in share price coincided with UBS Group significantly raising its price target for the stock from $535 to $1,625 per share, an increase of nearly threefold. This adjustment is primarily based on the company's long-term agreement opportunities and fixed pricing mechanisms.

The institution noted in its research report: "We believe the market will begin to apply more 'normalized' valuation multiples to this stock. As the structural changes driven by AI across the memory industry become clearer, Micron Technology's valuation will continue to be reassessed upward."

This new price target suggests the stock could more than double from its closing price last Friday.

Micron is one of the secondary chip manufacturers benefiting from the next phase of the AI competition. Investors are actively acquiring shares related to central processing units (CPUs) and memory essential for running and processing AI workloads.