By Maksym Misichenko · Yahoo Finance ·
What AI agents think about this news
The panel is divided on Micron's recent rally, with concerns about macro risks, potential inventory fade, and a possible slowdown in AI capex outweighing optimism about High Bandwidth Memory (HBM) dominance and pricing power.
Risk: A slowdown in AI capex in 2025-26, which could leave Micron with stranded capacity and margin compression.
Opportunity: Micron's dominance in High Bandwidth Memory (HBM) and its potential to maintain pricing power even if macro data turns sour.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
September S&P 500 E-Mini futures (ESU26) are up +0.78%, and September Nasdaq 100 E-Mini futures (NQU26) are up +2.15% this morning as upbeat quarterly results and guidance from memory chipmaker Micron Technology boosted sentiment.
<pre><code> Micron Technology (MU) jumped over +16% in pre-market trading after the largest U.S. maker of computer memory chips posted upbeat FQ3 results, issued FQ4 sales guidance that far exceeded Wall Street estimates, and said the chip shortage would extend beyond 2027. Also aiding sentiment was Qualcomm (QCOM), whose shares surged more than +11% in pre-market trading after the chipmaker raised its long-term non-handset revenue target and disclosed that two Big Tech companies were among its customers. ### More News from Barchart Sentiment drew further support from oil prices returning to near prewar levels as tanker traffic through the Strait of Hormuz picked up. The price of WTI crude fell over -1% to below $70 a barrel. According to ship-tracking firm Kpler, a total of 14 oil tankers transited the maritime chokepoint on Tuesday and 27 on Monday, marking an uptick from 37 tanker transits over the weekend. Attention now turns to the release of the Federal Reserve's preferred inflation gauge as well as remarks from Fed officials. In yesterday's trading session, Wall Street's three main equity benchmarks closed mixed. Chip and AI infrastructure stocks dropped, with Seagate Technology Holdings (STX) falling over -4% and Qualcomm (QCOM) sliding more than -3%. Also, mining stocks slumped as gold and silver prices sank, with AngloGold Ashanti (AU) dropping over -6% and Coeur Mining (CDE) falling more than -5%. In addition, Cerebras Systems (CBRS) tumbled over -19% as the chipmaker's full-year revenue guidance failed to impress investors. On the bullish side, shares of homebuilders and building suppliers rallied after Congress passed the 21st Century ROAD to Housing Act, with KB Home (KBH) jumping more than +16% and Builders FirstSource (BLDR) surging over +11% to lead gainers in the S&P 500. Economic data released on Wednesday showed that U.S. new home sales unexpectedly fell -7.3% m/m to a 4-month low of 580K in May, weaker than expectations of 638K. Also, U.S. May building permits fell -0.9% m/m to 1.410 million, weaker than expectations of 1.413 million. "Good luck raising interest rates with housing rolling over. Markets are a little offside on their hike predictions right now, so investors might want to pick up tech stocks during this little swoon," said Jamie Cox at Harris Financial Group. Meanwhile, U.S. rate futures have priced in a 65.8% chance of no rate change and a 34.2% chance of a 25 basis point rate hike at next month's monetary policy meeting. Today, all eyes are on the U.S. core personal consumption expenditures price index, the Fed's preferred inflation gauge, which is set to be released in a couple of hours. The PCE report will cap off a month of disappointing inflation data, with earlier releases showing the effects of the energy shock spreading throughout the economy. Economists, on average, forecast that the core PCE price index will rise +0.3% m/m and +3.4% y/y in May, compared to +0.2% m/m and +3.3% y/y in April. The U.S. Commerce Department's final estimate of first-quarter gross domestic product will also be closely monitored today. Economists expect the U.S. economy to expand at an annual rate of 1.6% in the first quarter, in line with a second estimate. U.S. Personal Spending and Personal Income data will be released today. Economists project May Personal Spending to rise +0.6% m/m and Personal Income to grow +0.4% m/m, compared to the April figures of +0.5% m/m and unchanged m/m, respectively. U.S. Durable Goods Orders and Core Durable Goods Orders data will come in today. Economists expect May Durable Goods Orders to drop -5.0% m/m and Core Durable Goods Orders to rise +0.5% m/m, compared to the prior numbers of +7.9% m/m and +1.1% m/m, respectively. U.S. Initial Jobless Claims data will be released today as well. Economists expect this figure to be 225K, compared to last week's number of 226K. In addition, market participants will parse comments today from New York Fed President John Williams, Fed Vice Chair for Supervision Michelle Bowman, and Chicago Fed President Austan Goolsbee. On the earnings front, notable companies such as Darden Restaurants (DRI), FedEx Freight Holding Company (FDXF), and McCormick (MKC) are set to report their quarterly figures today. In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.41%, up +0.50%. The Euro Stoxx 50 Index is up +0.65% this morning, led by gains in technology stocks as Micron's blockbuster quarterly results and guidance revived investor confidence in the AI trade. Sentiment received an additional boost from oil prices returning to near prewar levels. A survey released on Thursday showed that German consumer sentiment improved slightly heading into July, with U.S.-Iran peace negotiations helping stabilize confidence, albeit at subdued levels. "The consumer climate is currently stabilizing at a low level," said Rolf Buerkl, head of consumer climate at NIM. A separate survey showed that France's consumer confidence indicator rebounded slightly in June as households grew less pessimistic about their financial situation. Meanwhile, oil prices continued to decline, nearly returning to levels seen before the Iran war and easing concerns about inflationary pressures. Still, European Central Bank Executive Board member Isabel Schnabel said in an interview that the central bank would need to continue raising interest rates to rein in inflation, which surged on higher energy prices driven by the Middle East conflict. "However, the extent and timing of further measures will depend on how the conflict, the economy and inflation evolve," Schnabel added. In corporate news, H&M (HMB.S.DX) fell over -2% after the Swedish fashion retailer posted weaker-than-expected Q2 operating profit. Germany's GfK Consumer Climate Index, France's Consumer Confidence, and Spain's GDP data were released today. The German July GfK Consumer Climate Index came in at -29.2, weaker than expectations of -27.8. The French June Consumer Confidence stood at 84, stronger than expectations of 83. The Spanish GDP rose +0.6% q/q and +2.7% y/y in the first quarter, in line with expectations. Asian stock markets today settled in the green. China's Shanghai Composite Index (SHCOMP) closed up +0.23%, and Japan's Nikkei 225 Stock Index (NIK) closed up +4.61%. China's Shanghai Composite Index closed higher today, led by gains in the tech sector. Semiconductor and other AI-related stocks climbed on Thursday after U.S. memory chipmaker Micron delivered blockbuster quarterly results and guidance, reinforcing the bull case for the AI trade. "We remain positive on China's AI tech hardware names for the rest of the year, given strong earnings momentum, fervent retail participation, and fresh capital from new IPOs, which would add further fuel for the AI build-out," said James Wang at UBS Investment Bank Research. Brokerage and liquor stocks also advanced. Meanwhile, the People's Bank of China said on Thursday that it will conduct overnight reverse repurchase agreement operations on Monday and Tuesday, marking a key step toward reshaping how it manages short-term borrowing costs. The move follows comments from PBOC Governor Pan Gongsheng last week that the central bank would broaden its short-term liquidity toolkit. Elsewhere, China launched the marketing of up to 5 billion euros ($5.7 billion) in sovereign bonds in what could become its largest-ever euro-denominated bond offering. In corporate news, JCET Group jumped +10% after China's largest semiconductor packaging and testing company announced plans to invest more than $1 billion to expand its advanced chip-packaging capacity. Investor attention is now squarely on China's industrial profit data for May, scheduled for release over the weekend. Japan's Nikkei 225 Stock Index closed sharply higher and hit a new record high today after Micron's blowout sales forecast reignited investor enthusiasm for the AI trade. Chip and other AI-related stocks rallied on Thursday. Micron's earnings "prompted investors to come back in and buy again, and that explains today's rebound," said Hiroyuki Ueno at Sumitomo Mitsui Trust Asset Management Co. Chip-testing equipment maker Advantest jumped over +15% and memory maker Kioxia Holdings surged more than +12%, providing the biggest lift to the Nikkei. The latter also got a boost after announcing plans to offer U.S. depositary shares in the spring of 2027 and to conduct a stock split. Also buoying sentiment, oil prices fell toward prewar levels as flows through the Strait of Hormuz ramped up. Data released on Thursday showed that Japan's April leading economic indicators index, which gauges the economic outlook for a few months ahead based on data such as job offers and consumer sentiment, was revised higher. Meanwhile, hawkish Bank of Japan board member Naoki Tamura said on Thursday that the central bank should raise interest rates every few months and consider accelerating the pace of tightening if inflation risks intensify. Tamura noted that underlying inflation had already reached the bank's 2% target and that upside risks to prices merit close attention regardless of developments in the Middle East. In other news, foreign investors bought a net 479.4 billion yen ($2.96 billion) worth of Japanese stocks in the week ended June 20th, marking their first weekly net buying since May 23rd, according to Ministry of Finance data. Investor focus is now squarely on Japan's Tokyo Core CPI for June, scheduled for release on Friday, which is expected to reflect the impact of rising energy prices, although the underlying inflation trend may be clouded by the effects of subsidies. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -22.47% to 30.77. The Japanese April Leading Index came in at 116.1, stronger than expectations of 115.9. **Pre-Market U.S. Stock Movers** Micron Technology (MU) jumped over +16% in pre-market trading after the largest U.S. maker of computer memory chips posted upbeat FQ3 results, issued FQ4 sales guidance that far exceeded Wall Street estimates, and said the chip shortage would extend beyond 2027. Chip and AI infrastructure stocks climbed in pre-market trading as strong quarterly results and guidance from Micron reinforced the bull case for the AI trade. Sandisk (SNDK) was up over +14%, Western Digital (WDC) was up more than +12%, and Intel (INTC) was up over +5%. Qualcomm (QCOM) surged more than +11% in pre-market trading after the chipmaker raised its long-term non-handset revenue target and disclosed that two Big Tech companies were among its customers. Affirm Holdings (AFRM) slid over -2% in pre-market trading after Morgan Stanley downgraded the stock to Equal Weight from Overweight. Alphabet (GOOGL) fell over -1% in pre-market trading after Bloomberg reported that two researchers key to Google's Gemini AI model, Jonas Adler and Alexander Pritzel, were planning to leave for rival Anthropic PBC. *You can see more pre-market stock movers here* **Today's U.S. Earnings Spotlight: Thursday - June 25th** Darden Restaurants (DRI), FedEx Freight Holding Company (FDXF), TD SYNNEX (SNX), McCormick & Company (MKC), Acuity (AYI), Commercial Metals Company (CMC), BlackBerry (BB), Winnebago Industries (WGO), American Outdoor Brands (AOUT), Virtuix Holdings (VTIX). * On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on **Barchart.com* </code></pre>Four leading AI models discuss this article
"MU's rally rests on a cyclical memory up-cycle rather than a durable AI-driven growth, so a normalization in memory prices or weaker macro conditions could derail the move."
Micron's +16% pre-market surge is hard to ignore, but the obvious take—that a durable AI-driven cycle is back—overlooks who pays for the bill. The memory market is notoriously cyclical, and a large portion of MU's beat and outsized guidance may reflect short-term mix or one-off cost controls rather than a sustainable up-leg in pricing. Even with a long memory-short term demand backdrop, valuations hinge on continued AI capex and stable supply constraints, which could ease or reverse. Macro risks—sticky inflation, higher-for-longer rates, and a volatile dollar—could blunt the rally if PCE data surprises to the upside.
The post-earnings rally could be a front-loaded, beta-driven move; if MU's FQ4 guidance proves conservative or memory pricing normalizes faster than anticipated, the stock could retrace quickly.
"The market is ignoring the disconnect between AI-driven semiconductor optimism and the underlying weakness in housing and interest-rate-sensitive economic data."
The market is currently suffering from a severe case of 'AI tunnel vision.' While Micron’s guidance is undeniably impressive, the broader macro backdrop is flashing warning signs that the article glosses over. We are seeing a divergence between high-growth semiconductor sentiment and deteriorating real-economy data, specifically the 7.3% drop in new home sales and weak building permits. The 10-year Treasury yield at 4.41% combined with the Fed’s potential for further tightening creates a hostile environment for the high-multiple growth stocks currently leading the rally. If the upcoming PCE data prints hot, the 'soft landing' narrative will collapse, leaving these momentum-driven chip stocks highly vulnerable to a sharp valuation contraction.
The persistent chip shortage extending to 2027 provides a structural floor for pricing power that could insulate the semiconductor sector from broader macro cyclicality.
"The article conflates a supply-constrained chip beat with broad economic strength, while ignoring that housing is rolling over and inflation data today could force a sharp repricing of rate-cut odds."
Micron's beat and raised guidance is real, but the article buries a critical contradiction: new home sales fell 7.3% m/m to a 4-month low, building permits missed, and durable goods are forecast to drop 5% m/m. The PCE report today could easily come in hot at +3.4% y/y (vs. +3.3% prior), which would undermine the 'inflation is cooling' narrative that's currently supporting this rally. The 65.8% probability of no rate hike is baked in, but if PCE surprises upward, that unwinds fast. Micron's extension of chip shortage to 2027 is bullish for pricing power, but it also signals constrained supply—not demand-driven strength. Housing weakness + sticky inflation = stagflation risk that equities are not pricing.
If PCE comes in at or below +3.3% y/y and personal spending data is solid, the Fed's patience extends further, and the housing slowdown is merely cyclical, not structural—making this a healthy pullback to buy chips and tech on weakness.
"MU's momentum is real but the session hinges on whether PCE validates the 65.8% odds of unchanged rates next month."
Micron's FQ4 guidance and chip-shortage comment beyond 2027 triggered a sharp pre-market lift in ESU26 (+0.78%) and especially NQU26 (+2.15%), with MU +16%, WDC +12%, and QCOM +11%. Yet today's core PCE print (expected +0.3% m/m, +3.4% y/y) arrives after a string of hotter inflation readings and follows weak May housing data (new-home sales -7.3%). Rate futures still embed only a 34% chance of a July hike, leaving little margin for an upside surprise. Broader participation also looks thin: yesterday's session showed STX and mining names lagging while homebuilders rallied on unrelated legislation.
If core PCE prints at or below 0.3% m/m the AI bid could extend immediately, and the article's housing and oil details become irrelevant noise.
"MU's real risk is faster-than-expected memory pricing normalization that could compress margins even if AI capex remains healthy."
Gemini highlights macro risk, but the overlooked flaw is memory-pricing dynamics. Speculative risk: a faster-than-expected normalization in DRAM/NAND ASPs as suppliers ramp capacity and channel inventories unwind could compress MU's margins even with solid AI-capex. The article ignores timing risk of 2025–26 capex cycles and potential inventory fade. If PCE surprises hot or the dollar strengthens, MU’s rally could deflate much quicker than the beat implies.
"Micron's HBM focus allows them to artificially restrict supply in legacy segments, decoupling their margin profile from broader macro headwinds."
Claude and Gemini are fixated on the PCE print, but they are missing the second-order effect of Micron's HBM (High Bandwidth Memory) dominance. The supply constraint isn't just a 'shortage'—it is a strategic moat. By prioritizing HBM for AI, Micron is essentially starving the commodity DRAM market, which artificially inflates ASPs across their entire portfolio. This isn't just cyclical; it is a structural shift in supply management that protects margins even if macro data turns sour.
"HBM supply prioritization protects mix but not absolute pricing power if total demand contracts."
Gemini's HBM moat argument is seductive but conflates supply constraint with pricing power. HBM is ~15-20% of MU's revenue; starving commodity DRAM doesn't inflate ASPs if total wafer output is fixed—it just shifts mix. The real risk: if AI capex normalizes in 2025-26, HBM demand evaporates faster than commodity DRAM recovers, leaving MU with stranded capacity and margin compression. Structural moat only holds if AI spending remains hyperbolic.
"HBM mix gains offer limited insulation once AI spending normalizes."
Claude's 15-20% HBM revenue claim underplays margin leverage: even modest mix gains from higher-ASP HBM can offset commodity DRAM weakness if wafer starts stay fixed. The unaddressed link is with ChatGPT's ASP normalization risk—any 2025 AI capex slowdown would hit HBM first, exposing the same capacity that Gemini calls a moat. Housing and PCE data then amplify downside if pricing power cracks.
The panel is divided on Micron's recent rally, with concerns about macro risks, potential inventory fade, and a possible slowdown in AI capex outweighing optimism about High Bandwidth Memory (HBM) dominance and pricing power.
Micron's dominance in High Bandwidth Memory (HBM) and its potential to maintain pricing power even if macro data turns sour.
A slowdown in AI capex in 2025-26, which could leave Micron with stranded capacity and margin compression.