By Mackenzie Tatananni
The artificial-intelligence boom has ushered in an era where data is king, and players like Micron Technology, which make the technology to process it, are destined to flourish.
The company plans to begin construction on what it has dubbed "the largest semiconductor manufacturing facility in U.S. history" on Jan. 16. With up to four fabs, the facility will be the biggest of its kind, overtaking facilities used by Taiwan Semiconductor Manufacturing and Intel.
"As the global economy enters the AI era, leadership in advanced semiconductors will be the cornerstone in innovation and economic prosperity," CEO Sanjay Mehrotra said Wednesday in a press release announcing the groundbreaking.
It was a good time for an announcement: Micron's name has been in the news recently after it finished 2025 as one of the best performing stocks in the S&P 500.
Notably, the biggest winners were all in the data storage and memory chip space: along with Micron, Western Digital and Seagate Technology Holdings came out on top. Sandisk, which split off Western Digital in February and joined the benchmark index in November, was another strong performer.
And the gains have only continued. All four stocks spiked on Tuesday on a wave of investor enthusiasm. Sandisk shot up nearly 28% to a record, while Seagate and Western Digital jumped 14% and 17%, respectively, notching all-time closing highs. Micron gained a not-too-shabby 10%.
In the face of the stock's recent momentum, UBS analyst Timothy Arcuri raised his price target on Micron shares t0 $400 from $300, while reiterating a Buy rating. Shares were trading 0.5% lower at $341.70 on Wednesday.
Arcuri was compelled to hike his price target after meeting with members of management earlier this week. He came away from those discussions believing that investors are undervaluing the degree to which AI has made memory, specifically the dynamic random access memory that is Micron's bread and butter, "a more strategic asset."
In what Arcuri dubs a "pre-AI world," memory was simply a system component, meaning suppliers didn't see as much of a return on having a better product than peers. Now, in the throes of the AI boom, "memory has become a key differentiator within hardware systems," and companies like Micron are set to reap the benefits of having more high-performance products.
Investors are specifically failing to appreciate DRAM content growth within AI servers, Arcuri continued. Micron isn't the only DRAM manufacturer out there -- Samsung and SK Hynix, both based in South Korea, control sizable chunks of the global market. But as the only company based in the U.S., this gives Micron a certain edge.
Piper Sandler analyst Harsh Kumar also joined the chorus of support on Wednesday as he raised his price target on the stock to $400 from $275 and maintained an Overweight rating.
As data-center demand for memory products outstrips supply and prices rise, Micron is extremely well-positioned at least through the end of 2026, Kumar argued. He noted that supply for 2026 is already "effectively sold out, with limited ability to add capacity."
Micron is projected to bring on roughly 20% more supply in 2026, Kumar continued, as the company transitions to next-generation nodes and makes "tremendous efforts to increase supply."
Evidently, the company won't come out on top without putting in the work. But things already look good for Micron, and it's only up from here.
Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 07, 2026 13:11 ET (18:11 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.