Micron topped a $1 trillion market value on Tuesday after soaring almost 20% due to continued demand for its memory chips as the AI race continues at full steam.
CNBC detailed that the development came after UBS tripled its price target for the stock to more than $1,600 per share.
"We believe the market will start to put a more 'normal' multiple on the stock and MU will continue to re-rate higher as more details emerge about the structural changes AI has driven to the entire memory complex," the Swiss bank said.
The outlet noted that Micron is among the chipmakers benefiting from the surge of AI as several companies involved in the industry continue seeing sustained demand for its products.
Micron has also been able to rise prices as a result of shortages stemming from seemingly insatiable demand.
The S&P 500 and the Nasdaq Composite reached new all-time highs on Tuesday led by Micron and the prospect of an end to the war between the U.S. and Iran. The former rose by 0.6%, while the latter climbed 1.2%. The Dow Jones Industrial Average, in turn, lost 0.2%.
However, another report noted that investors are increasingly demanding higher returns to hold government debt, a development that is pushing borrowing costs higher and drawing attention to the growing pressures created by inflation, rising debt levels and geopolitical instability.
The change has become particularly visible in the global bond market, where yields on long-term government debt have climbed sharply in recent months. The yield on the 30-year U.S. Treasury bond recently rose above 5%, a level not seen since before the 2008 financial crisis, reflecting a reassessment of inflation and borrowing risks by investors, according to an analysis by Axios.
For years, governments in advanced economies were able to borrow heavily while maintaining relatively low borrowing costs. That environment allowed policymakers to finance spending programs, economic stimulus measures and tax cuts without triggering significant market resistance. According to the outlet, investors are increasingly signaling that era may be ending as debt burdens grow and inflation remains a concern.
Bond investors have closely tracked fluctuations in oil prices because of their influence on inflation expectations. MarketWatch reported Tuesday that Treasury yields declined after crude prices pulled back on hopes of progress toward a U.S.-Iran agreement, illustrating how closely bond markets remain tied to developments in the conflict.
Economists and market analysts have also pointed to broader structural factors behind the rise in yields. Investors are reportedly weighing the financial impact of persistent government deficits and growing demand for capital, particularly as governments and companies continue investing heavily in infrastructure, technology and artificial intelligence projects.
