Micron earnings lift tech shares as AI spending worries ease
Micron’s results and higher capital spending plan helped spark a global tech rally, while JPMorgan said AI investment remains profitable for now.
By Hana Yoshida · Markets Reporter
3 min read
Micron Technology helped set off a broad rally in technology shares after results topped Wall Street expectations, according to Fortune. The move gave investors fresh evidence that demand tied to artificial intelligence is still feeding revenue and spending across the chip sector.
Fortune reported that Micron posted revenue of $50 billion, ahead of analysts’ estimates of $43.2 billion. The memory-chip maker also lifted its capital spending outlook to more than $25 billion, a signal investors treated as continued confidence in AI-related demand, according to the report.
Jefferies analysts Masahiro Nakanomyo and Hisako Furusumi said Micron’s new capital expenditure target marked its third guidance increase in a row, according to Fortune. Jefferies said the outlook had risen from $18 billion at the start of the fiscal year to $20 billion in the first quarter and then to $25 billion in the second quarter, an 81% increase from a year earlier.
Micron shares rose 16% in overnight trading, according to Fortune. Nasdaq futures climbed 2.35% before the New York open, while S&P 500 futures rose 0.82%, the report said.
Rally spreads beyond U.S. futures
The buying extended into overseas markets, according to Fortune. In Europe, the Stoxx 600 rose 0.52% in early trading and the FTSE 100 gained 0.29% before midday in London.
Asian indexes also advanced, according to Fortune. South Korea’s KOSPI rose 5.42%, Japan’s Nikkei 225 gained 4.61%, India’s Nifty 50 added 0.36% and China’s CSI 300 rose 1.56%.
Reuters reported that South Korean chipmaker SK Hynix plans to raise $29 billion in U.S. markets through American Depositary Receipts. Fortune said the deal would be the largest ADR offering on record and comparable in size to one of the largest initial public offerings ever.
JPMorgan sees AI spending as profitable
JPMorgan strategists Dubravko Lakos-Bujas and Bhupinder Singh forecast that the S&P 500 will rise another 6% to 7,800 this year, according to Fortune. They also cautioned that the advance could be uneven because the market still has to clear several hurdles.
The JPMorgan team said speculative and lower-quality technology stocks have too much momentum, according to Fortune. The strategists warned that second- and third-order AI plays face a high probability of a "flash-crash," the report said.
JPMorgan analysts Tarek Hamid and Nathaniel Rosenbaum estimated that hyperscaler capital spending has reached $650 billion for 2026 and could exceed $1.1 trillion in 2027, according to Fortune. They raised their estimate for total AI capital spending through 2030 to $5.5 trillion from a prior $5.1 trillion forecast.
The JPMorgan analysts said hyperscalers remain highly profitable and that early returns on investment are positive, according to Fortune. That assessment addressed one of the central concerns among investors who have questioned whether AI spending has moved ahead of earnings potential.
Market breadth has shifted this year, according to Ben Carlson of Ritholtz Wealth Management, cited by Fortune. Carlson said the S&P 493 has outpaced both the full S&P 500 and the Magnificent Seven, while Fortune reported that the Nasdaq Composite was down 4.43% over the prior month despite the latest tech-led rebound.
This story draws on original reporting from Fortune.