Wall Street Rises on Easing Tensions and Strong Earnings
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 hours ago
0mins
Source: seekingalpha
- Investor Sentiment Boosted: Investor sentiment significantly improved as President Trump announced that a framework to end the conflict with Iran and restore shipping through the Strait of Hormuz had been largely negotiated with Israel and regional allies, leading to a rally in the stock market.
- Inflation Data Supports Equities: The core Personal Consumption Expenditures price index indicated that underlying price pressures rose less than expected in April, further bolstering market confidence that inflation is on a gradual cooling path, thus providing additional support for equities.
- Micron Technology Soars: Micron Technology's stock jumped 19% on Tuesday, surpassing a $1 trillion market cap, as UBS raised its price target to a new Wall Street high, reflecting continued strong demand in the market and pushing its stock up over 220% this year.
- Zscaler Plummets: Zscaler's stock plunged 32% after the cybersecurity firm issued weaker-than-expected guidance alongside its earnings report, marking the largest single-day decline on record and raising concerns about its future growth prospects.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy MU?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on MU
Wall Street analysts forecast MU stock price to fall
26 Analyst Rating
24 Buy
2 Hold
0 Sell
Strong Buy
Current: 923.520
Low
235.00
Averages
336.12
High
500.00
Current: 923.520
Low
235.00
Averages
336.12
High
500.00
About MU
Micron Technology, Inc. provides memory and storage solutions. The Company delivers a portfolio of high-performance dynamic random-access memory (DRAM), NAND, and NOR memory and storage products through its Micron and Crucial brands. The Company's products enable advancing in artificial intelligence (AI) and compute-intensive applications. Its segments include Cloud Memory Business Unit (CMBU), Core Data Center Business Unit (CDBU), Mobile and Client Business Unit (MCBU) and Automotive and Embedded Business Unit (AEBU). CMBU is focused on memory solutions for large hyperscale cloud customers, and high bandwidth memory (HBM) for all data center customers. CDBU is focused on memory solutions for mid-tier cloud, enterprise, and OEM data center customers and storage solutions for all data center customers. MCBU is focused on memory and storage solutions for mobile and client segments. AEBU is focused on memory and storage solutions for the automotive, industrial, and consumer segments.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Micron's Earnings Surge Driven by AI Demand
- Significant Earnings Growth: Micron's earnings have surged due to memory chip demand far exceeding supply, with its stock price rising over 800% in the past year, pushing its market capitalization past $1 trillion and highlighting the company's strong performance amid the AI megatrend.
- Production Capacity Expansion Plans: Micron plans to invest $200 billion over the next several years to rapidly expand its production capacity, expecting meaningful supply expansion by 2027 and 2028 to meet the soaring market demand.
- Market Cycle Risks: Despite the current strong demand, analysts predict that supply will catch up to demand by 2028, potentially leading to normalized pricing that could impact the company's revenues and earnings, especially after new facilities become operational.
- Historical Cycle Analysis: Historical data shows that Micron's P/E ratio typically declines after earnings peaks; it is expected that by 2028, earnings could reach $115 per share with a P/E ratio dropping to 4.5, indicating that the current stock price of $899 may be overvalued.
See More
Micron Technology Surpasses $1 Trillion Market Cap
- Market Cap Milestone: Micron Technology has surpassed a $1 trillion market cap, joining the ranks of Meta, Tesla, and Broadcom, highlighting its significant role in the AI chip market and likely attracting increased investor interest.
- Stock Surge: Micron's stock has skyrocketed by 867% over the past year and 227% this year, primarily driven by surging demand for memory, particularly in AI applications, which has significantly boosted the company's performance.
- Market Share Growth: By 2025, Micron held a 23% revenue share in the global DRAM market and increased its HBM market share from 9% in 2024 to 21%, demonstrating rapid advancement in high-bandwidth memory technology.
- Supply Constraints Expected: The CEO indicated that demand for DRAM and NAND flash memory is projected to account for 50% of the industry's total addressable market for the first time, but supply will be constrained, with DRAM shipments expected to grow around 20%, further solidifying its market position.
See More
AI Drives Strong Growth for Lumentum and Applied Materials
- Lumentum Performance Surge: In the first nine months of fiscal 2026, Lumentum's revenue soared 72% year-over-year to over $2 billion, with current quarter revenue expected to exceed $985 million, indicating sustained AI-driven demand that strengthens its leadership in the photonics market.
- Significant Profitability Boost: Lumentum's earnings per share increased 4.5 times year-over-year to $5.27 in the first nine months of fiscal 2026, with robust revenue growth poised to enhance profitability, justifying its high 56 times P/E ratio as investors consider entry points.
- Applied Materials Growth Acceleration: Applied Materials reported an 11% year-over-year revenue increase to $7.91 billion in Q2 of fiscal 2026, with current quarter revenue projected to reach $8.95 billion, reflecting a strong 23% year-over-year growth driven by robust AI chip demand.
- Optimistic Market Outlook: Applied Materials anticipates over 30% growth in its semiconductor equipment business in 2026, bolstered by partnerships with industry leaders to develop AI-focused equipment, leading analysts to significantly raise earnings expectations and reflect strong market confidence.
See More
Lumentum and Applied Materials Show Strong Growth Amid AI Demand
- Lumentum Revenue Surge: Lumentum's revenue increased by 72% year-over-year in the first nine months of fiscal 2026, surpassing $2 billion, with current quarter guidance suggesting revenue could double to $985 million from $480.7 million last year, indicating robust demand driven by AI infrastructure.
- Profitability Enhancement: Lumentum's earnings per share soared 4.5 times year-over-year to $5.27 in the first nine months of fiscal 2026, reflecting high margins from its data center products and signaling sustained profitability growth ahead.
- Applied Materials Performance Recovery: Applied Materials reported an 11% year-over-year revenue increase in Q2 2026, reaching $7.91 billion, with earnings per share rising 20% to $2.86, showcasing a strong rebound in the semiconductor equipment market.
- Future Growth Outlook: The company anticipates $8.95 billion in revenue for the current quarter, a 23% increase, with earnings expected to grow by 36%, and forecasts over 30% growth in its semiconductor equipment business in 2026, solidifying its market position.
See More
Micron Technology Thrives Amid AI Boom
- Surging Market Demand: As the infrastructure for artificial intelligence accelerates, demand for memory chips has skyrocketed, resulting in Micron's stock price soaring over 800% in the past year and achieving a market cap of over $1 trillion, showcasing its strong pricing power in the market.
- Production Capacity Expansion Plan: Micron plans to invest $200 billion over the next several years to rapidly expand its production capacity, expecting significant supply expansion by 2027 and 2028, thereby enhancing its competitive position in the market.
- Spike in Customer Orders: Many customers are placing advanced orders to secure production capacity, driving a self-reinforcing cycle of rising demand and prices, which could lead to a supply-demand balance by 2028, impacting future revenues and profitability.
- Future Earnings Outlook: Based on historical data, Micron's stock price could fluctuate between $275 and $930 when it peaks in the earnings cycle in 2028, making the current price of $899 appear extremely expensive, prompting investors to carefully assess future market trends.
See More
Vanguard Tech ETF Shows Strong Growth Potential
- Significant Returns: The Vanguard Information Technology ETF has achieved over 836% total returns over the past decade, compared to around 324% for the S&P 500, highlighting its strong performance in the tech sector.
- Diversified Portfolio: With 316 holdings, nearly 40% of the ETF is allocated to semiconductor stocks, effectively spreading risk and ensuring that other stocks can support overall investment if one subsector underperforms.
- Future Earnings Potential: Assuming a monthly investment of $200, if the ETF maintains a 24% average annual return, the portfolio could reach $242,000 in 15 years, showcasing the immense potential of long-term investing.
- Risk Management Strategy: While the tech sector offers high return potential, investors must ensure their portfolios are diversified to manage market volatility and maintain a balance between risk and returns.
See More
Micron's Earnings Surge Driven by AI Demand
- Significant Earnings Growth: Micron's earnings have surged due to memory chip demand far exceeding supply, with its stock price rising over 800% in the past year, pushing its market capitalization past $1 trillion and highlighting the company's strong performance amid the AI megatrend.
- Production Capacity Expansion Plans: Micron plans to invest $200 billion over the next several years to rapidly expand its production capacity, expecting meaningful supply expansion by 2027 and 2028 to meet the soaring market demand.
- Market Cycle Risks: Despite the current strong demand, analysts predict that supply will catch up to demand by 2028, potentially leading to normalized pricing that could impact the company's revenues and earnings, especially after new facilities become operational.
- Historical Cycle Analysis: Historical data shows that Micron's P/E ratio typically declines after earnings peaks; it is expected that by 2028, earnings could reach $115 per share with a P/E ratio dropping to 4.5, indicating that the current stock price of $899 may be overvalued.
See More
Micron Technology Surpasses $1 Trillion Market Cap
- Market Cap Milestone: Micron Technology has surpassed a $1 trillion market cap, joining the ranks of Meta, Tesla, and Broadcom, highlighting its significant role in the AI chip market and likely attracting increased investor interest.
- Stock Surge: Micron's stock has skyrocketed by 867% over the past year and 227% this year, primarily driven by surging demand for memory, particularly in AI applications, which has significantly boosted the company's performance.
- Market Share Growth: By 2025, Micron held a 23% revenue share in the global DRAM market and increased its HBM market share from 9% in 2024 to 21%, demonstrating rapid advancement in high-bandwidth memory technology.
- Supply Constraints Expected: The CEO indicated that demand for DRAM and NAND flash memory is projected to account for 50% of the industry's total addressable market for the first time, but supply will be constrained, with DRAM shipments expected to grow around 20%, further solidifying its market position.
See More
AI Drives Strong Growth for Lumentum and Applied Materials
- Lumentum Performance Surge: In the first nine months of fiscal 2026, Lumentum's revenue soared 72% year-over-year to over $2 billion, with current quarter revenue expected to exceed $985 million, indicating sustained AI-driven demand that strengthens its leadership in the photonics market.
- Significant Profitability Boost: Lumentum's earnings per share increased 4.5 times year-over-year to $5.27 in the first nine months of fiscal 2026, with robust revenue growth poised to enhance profitability, justifying its high 56 times P/E ratio as investors consider entry points.
- Applied Materials Growth Acceleration: Applied Materials reported an 11% year-over-year revenue increase to $7.91 billion in Q2 of fiscal 2026, with current quarter revenue projected to reach $8.95 billion, reflecting a strong 23% year-over-year growth driven by robust AI chip demand.
- Optimistic Market Outlook: Applied Materials anticipates over 30% growth in its semiconductor equipment business in 2026, bolstered by partnerships with industry leaders to develop AI-focused equipment, leading analysts to significantly raise earnings expectations and reflect strong market confidence.
See More
Lumentum and Applied Materials Show Strong Growth Amid AI Demand
- Lumentum Revenue Surge: Lumentum's revenue increased by 72% year-over-year in the first nine months of fiscal 2026, surpassing $2 billion, with current quarter guidance suggesting revenue could double to $985 million from $480.7 million last year, indicating robust demand driven by AI infrastructure.
- Profitability Enhancement: Lumentum's earnings per share soared 4.5 times year-over-year to $5.27 in the first nine months of fiscal 2026, reflecting high margins from its data center products and signaling sustained profitability growth ahead.
- Applied Materials Performance Recovery: Applied Materials reported an 11% year-over-year revenue increase in Q2 2026, reaching $7.91 billion, with earnings per share rising 20% to $2.86, showcasing a strong rebound in the semiconductor equipment market.
- Future Growth Outlook: The company anticipates $8.95 billion in revenue for the current quarter, a 23% increase, with earnings expected to grow by 36%, and forecasts over 30% growth in its semiconductor equipment business in 2026, solidifying its market position.
See More
Micron Technology Thrives Amid AI Boom
- Surging Market Demand: As the infrastructure for artificial intelligence accelerates, demand for memory chips has skyrocketed, resulting in Micron's stock price soaring over 800% in the past year and achieving a market cap of over $1 trillion, showcasing its strong pricing power in the market.
- Production Capacity Expansion Plan: Micron plans to invest $200 billion over the next several years to rapidly expand its production capacity, expecting significant supply expansion by 2027 and 2028, thereby enhancing its competitive position in the market.
- Spike in Customer Orders: Many customers are placing advanced orders to secure production capacity, driving a self-reinforcing cycle of rising demand and prices, which could lead to a supply-demand balance by 2028, impacting future revenues and profitability.
- Future Earnings Outlook: Based on historical data, Micron's stock price could fluctuate between $275 and $930 when it peaks in the earnings cycle in 2028, making the current price of $899 appear extremely expensive, prompting investors to carefully assess future market trends.
See More
Vanguard Tech ETF Shows Strong Growth Potential
- Significant Returns: The Vanguard Information Technology ETF has achieved over 836% total returns over the past decade, compared to around 324% for the S&P 500, highlighting its strong performance in the tech sector.
- Diversified Portfolio: With 316 holdings, nearly 40% of the ETF is allocated to semiconductor stocks, effectively spreading risk and ensuring that other stocks can support overall investment if one subsector underperforms.
- Future Earnings Potential: Assuming a monthly investment of $200, if the ETF maintains a 24% average annual return, the portfolio could reach $242,000 in 15 years, showcasing the immense potential of long-term investing.
- Risk Management Strategy: While the tech sector offers high return potential, investors must ensure their portfolios are diversified to manage market volatility and maintain a balance between risk and returns.
See More
