US Open: Micron restores faith in the never-ending AI boom

Wall Street is starting today’s session higher, with improving sentiment driven by two different but equally important factors. On the one hand, yesterday’s PCE inflation data came in softer than expected, giving markets hope that the Fed will not need to add further rate hikes in the coming months. On the other hand, the U.S. economy continues to show resilience, with GDP growth coming in above forecasts. This is exactly the combination Wall Street needed.

However, there is another, perhaps even more important catalyst behind today’s market move. Micron’s results can no longer be treated as just another semiconductor earnings report. The company delivered a record quarter, generating $54.2 billion in revenue, compared with $41.4 billion in the previous quarter, while its outlook for the next period once again came in well above expectations. More important than the numbers themselves is what the report says about demand for memory used in AI infrastructure.

Micron is therefore showing that the AI boom does not end with processors and computing chips. Without sufficient memory, the expansion of data centers and increasingly advanced AI models is also impossible. The company has already secured sales for a significant portion of next year’s production, while management currently sees no clear signs that would point to a rapid rebalancing of supply and demand in the memory market. This may ultimately matter more to Wall Street than the record quarter itself.

In a sense, Micron’s results are beginning to play a role similar to Nvidia’s earnings reports. The issue is not simply the health of one company, but what its results say about the broader AI market. If demand for memory remains this strong and data center customers are already securing supplies for years ahead, it is difficult to argue that the current investment cycle is coming to an end.

That is why today’s gains on Wall Street have stronger foundations than a simple reaction to one favorable inflation reading. Lower PCE inflation gives markets some breathing room on the Fed front, stronger GDP highlights the resilience of the economy, while Micron provides another piece of evidence that AI-related spending continues to grow. After a very difficult September, U.S. indices are starting the new month with a clear rebound, once again putting the technology sector at the center of attention.

Source: XTB Research

Futures on the S&P 500 (US500) are gaining slightly today, while market sentiment remains supported by several positive catalysts that have emerged in recent days. Softer-than-expected PCE inflation, stronger economic growth data and very strong results from technology companies, led by Micron, have given investors further arguments for continued gains. At the same time, markets remain highly sensitive to signals from the Fed and movements in U.S. Treasury yields, which could determine the pace of the next move on Wall Street.

Source: XTB Research

Company News

Micron (MU.US) is gaining strongly after reporting results that show how increasingly powerful demand for memory is becoming as a result of the AI boom. Micron is no longer simply benefiting from higher memory prices — the scale of the earnings growth shows that data centers require increasingly large quantities of DRAM and HBM, while the company remains one of the key suppliers of this infrastructure. Importantly, its outlook for the next quarter also remains very strong, suggesting that the current demand cycle is far from over.

Key results:

• Revenue: $11.32 billion vs. $7.75 billion a year earlier

• Net income: $4.88 billion vs. $887 million a year earlier

• EPS: $4.26 vs. $0.79 a year earlier

• Next-quarter revenue guidance: approx. $12.5 billion

• Projected gross margin: approx. 51%

• Dividend: $0.15 per share

The most important factor for the market remains the continued increase in demand for HBM memory used in AI servers. This segment makes Micron’s results relevant not only for the company itself, but also as another signal of the scale of investment flowing into the broader AI infrastructure ecosystem.

Broadcom (AVGO.US) is in focus after reports that it could lend Anthropic as much as $42 billion to finance chips used to expand its AI infrastructure. The potential size of the financing highlights how quickly computing requirements are growing among companies developing their own AI models. For Broadcom, it is another indication that demand for specialized chips and the infrastructure required to support them could remain strong for years to come.

Rocket Lab (RKLB.US) is gaining after signing the largest commercial contract in the company’s history for Electron rockets. The agreement covers 20 launches for Japanese company Synspective, which will use the rockets to deploy SAR radar satellites. The contract improves visibility into Rocket Lab’s future revenue and shows that demand for commercial satellite launch services remains strong.

Accenture (ACN.US) is rising sharply after quarterly results came in above market expectations and the company provided an upbeat outlook. The company continues to benefit from strong demand for digital transformation and artificial intelligence implementation, while its improved guidance suggests that businesses are not cutting back on spending on new technologies. Accenture’s results are also significant from a broader perspective, as they show that the AI boom is increasingly reaching beyond chip manufacturers.

Alphabet (GOOGL.US) shares are rising after the presentation of Gemini 4 Argon, Google’s latest AI model, which the company says outperformed competing solutions in 13 of 19 benchmarks covering areas such as software engineering, knowledge work and cybersecurity. Google is initially making the model available to selected users, with broader access for developers, businesses and consumers expected after further safety testing.