Investors rushed back into semiconductor names on Tuesday, bucking a monthlong slump in the sector and boosting Micron Technology stock, which rallied more than 12% to reclaim its $1 trillion valuation. Expect another rollercoaster on Wednesday.
Micron stock was giving up some of those gains in premarket trading, shedding 2.4%, but there is little reason to believe that change will hold -- for better or worse. No matter what, that $1 trillion market cap-bar will stay in focus.
One of the darlings of the chip industry, memory and data-storage focused Micron has been a key beneficiary of investments into artificial intelligence as Big Tech companies scramble for memory.
But risks loom as valuations stay stretched amid questions of how high chip prices can climb -- Micron is down 20% in the last month but has soared almost 800% in a year -- and Wall Street's bar for success remains sky-high.
The heart of Big Tech earnings season is now here, promising fresh developments that will have investors clamoring to shift their bets on. Three reports, in particular, Wednesday will be of interest to Micron investors.
Alphabet reports after the bell. Worries linger for Micron that Google's touted innovations in chip efficiency could bite into demand for memory. But a blowout AI forecast from Alphabet -- let alone muted guidance on innovations -- might similarly see Micron shine as an investor favorite positioned to keep winning from memory demand.
Tesla, the electric-vehicle maker with a growing AI business, could similarly provide a powerful read-across for Micron when it reports after the bell.
IBM, too, could be a catalyst for Micron. Much of that stock's struggles have come as companies pivot away from its enterprise software and mainframes in favor of AI hardware such as chips.
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