Micron Earnings Spark AI Rally and Boost Global Memory Chip Stocks
Market Reactions and Broader Economic Impacts
A look at the day ahead in European and global markets from Ankur Banerjee
Micron Earnings Ignite AI Rally
High-stakes earnings from Micron more than delivered by outlining strong demand for its memory chips and that was enough to breathe life back into an AI-fuelled rally as investors shrugged off, for now, worries over valuations and demand.
Valuation Concerns and Investor Sentiment
Markets have cowered in recent days over worries that valuations for AI-related firms have become stretched following years of blistering gains with concerns also rising over whether the massive spending will take too long to pay off.
Micron’s Strategic Position in AI Supply Chain
Micron, the only U.S.-based manufacturer of high bandwidth memory chips used alongside Nvidia's AI processors, helped ease some of those concerns as its earnings showed customers had committed $22 billion to lock in supplies of memory chips.
The firm also said it does not have a sense of when memory supply will catch up with increasing demand. Good news then also for Micron's South Korean rivals SK Hynix and Samsung Electronics.
Global Market Movements
South Korean Chipmakers Surge
They both surged to take the KOSPI up about 5%, as the world's best-performing stock market since the start of 2025 takes a wild ride on AI frenzy, fuelled by insatiable retail enthusiasm.
Societal Impact in South Korea
Not only has this AI rally turned the two South Korean chipmaking giants into stock market darlings and trillion-dollar firms, it has also thrust their employees into the top tier of the country's highly competitive marriage market.
Oil Prices and Inflationary Pressure
Oil prices are back where they were before war broke out in the Middle East at the end of February. That could help ease some inflationary pressure. No one seems to have told bond traders though, who are still pricing in at least one rate hike from the Federal Reserve this year.
Currency Markets and Upcoming Economic Events
Dollar Strength and Yen Weakness
Those rate-hike bets have led the dollar to a more than one-year high against a basket of currencies, with the yen hovering near 40-year lows. It last fetched 161.73 per U.S. dollar and a break beyond 161.96 would be its lowest since 1986.
Focus on U.S. Inflation Data
The spotlight will turn to U.S. inflation data, the Personal Consumption Expenditures price index, that could perhaps push the yen beyond those levels and to the brink of another round of intervention from Tokyo.
Key Economic Events to Watch
Key developments that could influence markets on Thursday:
Economic events: Germany GfK consumer sentiment for July, France consumer confidence for June
(By Ankur Banerjee in Singapore; Editing by Jacqueline Wong)