U.S. chip stocks rally as Micron signals prolonged AI-driven supply tightness

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Chip stocks rally on AI demand

Highlights

Micron surges over 16% after reporting $25.11 earnings per share versus $20.86 expected and forecasting August-quarter EPS of $30 to $32, citing AI-driven supply tightness until after 2027.
Qualcomm rises nearly 10% after doubling its fiscal 2029 non-handset revenue target to $40 billion, announcing a multiyear data center CPU deal with Meta, and targeting $15 billion in data center AI revenue by 2029.
All major banks pass the Federal Reserve’s stress tests, with JPMorgan launching a $50 billion buyback and increasing its quarterly dividend to $1.65, and Goldman Sachs raising its dividend to $5.

Micron results and chip outlook drive Thursday trading

As reported by CNBC, Micron is jumping more than 16% after posting quarterly earnings per share of $25.11, ahead of analyst estimates of $20.86, and forecasting August-quarter earnings per share of $30 to $32 versus expectations of $25.72.

The memory chipmaker says market conditions remain tight beyond calendar year 2027 and adds it still does not have visibility on when supply catches up with AI-fueled demand. Micron also says it has signed 16 strategic supply agreements with defined pricing structures to improve revenue visibility.

Qualcomm is also gaining nearly 10% after raising its fiscal 2029 non-handset revenue target to $40 billion at its investor day, about double its earlier goal from 2024. The company says its new data center AI infrastructure strategy aims for more than $15 billion in revenue by fiscal 2029, and it announces a multiyear agreement with Meta to supply data center CPUs.

Intel, meanwhile, is initiated with a hold rating at Goldman Sachs and a $150 price target. Goldman analysts say Intel benefits from the agentic AI theme and its role as a U.S. foundry champion, but they argue the stock’s sharp rise this year already reflects much of that upside.

Banks, consumer names and AI talent moves shape broader market picture

All major banks pass the Federal Reserve’s annual stress tests, clearing the way for additional capital returns to shareholders. JPMorgan raises its quarterly dividend to $1.65 from $1.50 and approves a new $50 billion share buyback program, while Goldman Sachs lifts its quarterly dividend to $5 from $4.50.

Jefferies reports second-quarter results slightly below estimates as asset management fees and investment return revenue fall 35% from a year earlier. The firm says investment banking revenue rises 57% year over year, helped by a stronger dealmaking environment.

Darden Restaurants reports fiscal fourth-quarter earnings per share of $3.66, topping estimates by 3 cents, while comparable store sales increase 4.6% against expectations of 4.1%. Olive Garden underperforms expectations, but LongHorn Steakhouse posts stronger comparable sales, and lighter-than-expected fiscal 2027 guidance weighs on the stock.

McCormick beats on revenue and reports adjusted earnings per share of 80 cents, above estimates of 70 cents, while organic sales growth reaches 1.7%. The spice maker reaffirms its full-year adjusted earnings outlook.

Alphabet shares are lower after reports that two more AI researchers plan to leave the company for Anthropic, extending a recent pattern of talent departures to rivals including OpenAI. Affirm also comes under pressure after Morgan Stanley downgrades the buy now, pay later company to hold and removes it from its top pick list following a strong rally since late March.

Our earlier article on Micron’s earnings-driven stock surge explained how a sharp quarterly beat and upbeat guidance reinforced that AI data-center buildouts are translating into real demand for memory chips. It also noted Micron’s 16 long-term customer agreements, designed to improve revenue visibility and reduce the industry’s traditional cyclicality, helping lift sentiment across the broader semiconductor space.

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