The Nasdaq closed lower on June 24 as tech stocks came under pressure, but strong earnings from memory chipmaker Micron helped stabilize the sector and sparked a broader rally in after-hours trading, easing investor fears about the health of the artificial intelligence boom.
The Nasdaq Composite fell 0.43% to close at 25,476.64 on June 24, according to Investing.com, as concerns over stretched valuations in AI-related stocks weighed on the market earlier in the day. However, Micron’s blockbuster quarterly results released after the close reversed the mood.
Micron reported fiscal third-quarter revenue of $41.46 billion, far exceeding the consensus estimate of $35.84 billion, according to CNBC. The company’s adjusted earnings per share came in at $25.11, well above the estimated $20.78, representing a 22.55% beat on the bottom line. The company’s gross margin expanded to 84.9%, surpassing analyst expectations of 81.83%, according to Yahoo Finance.
The strong results reflected soaring demand for memory chips driven by artificial intelligence infrastructure buildout. Memory prices have skyrocketed as AI companies consume production capacity from the handful of suppliers. Micron’s stock jumped 15% in extended trading following the earnings release and rose 17% in premarket trading on June 25, according to Reuters.
A key driver of investor confidence was Micron’s forward guidance. The company said its customers had committed $22 billion for its memory chips and signed 16 long-term agreements with data center operators and automakers locking in sales for three to five years, according to CNBC. The company expects revenue of approximately $50 billion for the current quarter, well above analyst expectations of $43.58 billion.
The earnings beat and upbeat outlook helped reignite confidence in the AI trade after weeks of volatility. Nasdaq 100 futures jumped 2.1% following the earnings announcement, according to Reuters. Tech-heavy Asian markets surged the next morning, with Japan’s Nikkei gaining 4.6% and South Korea’s KOSPI rising 5.4%, as traders abandoned fears that AI valuations had become stretched.
“Earnings trump everything,” analysts at Barclays said in a note on June 25, per Reuters, underscoring how Micron’s results helped settle investor concerns that had driven sharp declines earlier in the week. The company’s guidance signaled continued robust demand for AI infrastructure, suggesting the AI boom remains intact despite recent market volatility.
Micron’s stock has surged roughly 700% over the past year, lifting the company’s market capitalization past $1 trillion, according to CNBC. The memory chipmaker’s results demonstrated that despite near-term market jitters, the underlying demand drivers for AI infrastructure remain strong, providing a stabilizing force for the broader technology sector.
Sources
- CNBC — Micron’s Q3 earnings, revenue of $41.46 billion vs. $35.84 billion estimate, adjusted EPS of $25.11 vs. $20.78 estimate, stock jump of 15% in extended trading, customer commitments of $22 billion, long-term agreements, Q4 revenue guidance of $50 billion, stock up 700% over past year, market cap exceeding $1 trillion
- Investing.com — Nasdaq Composite closed at 25,476.64, down 0.43% on June 24
- Yahoo Finance — Micron’s adjusted gross margin of 84.9% vs. analyst expectations of 81.83%
- Reuters — Tech stocks surged after Micron earnings, Micron shares rose 17% in premarket trading on June 25, customers committed $22 billion for memory chips, Nasdaq 100 futures gained 2.1%, Japan’s Nikkei jumped 4.6%, South Korea’s KOSPI gained 5.4%, Barclays analyst commentary on earnings
