Micron Soared 19%: Has the Chipmaker's Strong Earnings Report Restored the Market's Faith in AI?

Shares of chipmaker Micron soared 19% in the first few minutes after the opening of the main trading session in the U.S., but then slowed their gains somewhat—at the time of publication, they were up 14%. Following Micron’s shares, the major U.S. stock indices briefly moved into positive territory after the recent sell-off, but the trend then reversed: The S&P 500 and Nasdaq Composite have slipped back into negative territory, losing a symbolic 0.06% and 0.63%, respectively. The Dow Jones is up 0.52%.

The Philadelphia Semiconductor Index also opened more than 5% higher on June 25, but then lost momentum and briefly dipped into negative territory relative to the previous close, falling 0.09%.

Apple shares dragged down the S&P 500 and the Nasdaq Composite, falling 4.5% after the company announced price increases for several MacBook and iPad models due to a shortage of memory chips, CNBC notes. Investors are also assessing the latest macroeconomic data, Reuters reports (the Fed’s preferred measure of inflation rose in May at the fastest pace since October 2023, but came in only slightly above forecasts; if hostilities in the Middle East do not resume, it is possible that inflation peaked in May amid rising energy prices, Barron’s noted ).

In addition, markets are being influenced by Micron’s quarterly report, released yesterday after the market closed: in it, the chipmaker reported a year-over-year revenue increase of more than four times—which exceeded analysts’ expectations. Micron benefited from the expansion of artificial intelligence infrastructure. Memory manufacturers are struggling to keep up with demand for memory chips, which has led to shortages in segments such as computers, smartphones, automobiles, and AI chips, CNBC reports, noting that this supply imbalance has driven up memory prices and boosted Micron’s results.

This article was AI-translated and verified by a human editor