UBS Projects Micron Could Repurchase 40% of Shares by 2028

UBS projects Micron Technology will generate more than $400 billion in cumulative free cash flow between 2027 and 2029. This cash pile, driven by surging demand for AI memory, could allow the chipmaker to repurchase over 40% of its outstanding shares after December 2026.

The Swiss bank's thesis centers on a persistent supply shortage of high-bandwidth memory, or HBM, and DRAM through 2028. HBM is essential for AI accelerators, and demand is seen as structural.

UBS pegs Micron’s earnings per share for 2026 at roughly $60, significantly above the broader analyst consensus of $40. In May, UBS raised its price target on Micron to $1,625 from $535, prompting an 18% stock surge and briefly pushing the market capitalization over $1 trillion.

A potential 40% reduction in shares outstanding would mechanically increase earnings per share even if net income remained flat. The primary risk is that the massive free cash flow projection, based on a multi-year supply shortage, does not materialize due to the memory market's historical cyclicality.

However, the HBM market is considered structurally different, with higher barriers to entry and an oligopoly between Micron, Samsung, and SK Hynix.