Micron Sales Forecast Sparks AI Rally, Nasdaq Futures Surge

Global stock futures jumped Thursday after Micron Technology reported a blockbuster sales forecast that dashed fears of a near-term pullback in the artificial intelligence trade, sending semiconductor shares soaring and lifting broader market sentiment.

Contracts on the Nasdaq 100 surged 2.1% as of 8:00 a.m. ET, while S&P 500 futures gained a more modest 0.7%, according to a report from Zero Hedge. Micron shares rose 18% in premarket trading, pushing the broader semiconductor complex higher: the SOXX index climbed 5% and a DRAM-focused index jumped 12%.

The memory chipmaker's fiscal fourth-quarter revenue guidance exceeded analyst expectations, signaling that an AI-fueled growth run remains on a strong trajectory. Micron said tight supply conditions are expected to persist beyond fiscal 2027 and that it has no line of sight on when production can catch up with demand, Zero Hedge reported.

In its fiscal third quarter, Micron posted earnings per share of $25.11, beating consensus estimates by $4.72, according to a report from Nasdaq. Revenue came in at $41.5 billion, topping expectations by $6.4 billion and quadrupling from the prior year, that report said. The company is now guiding to $50 billion in revenue for the current quarter.

Another Nasdaq report highlighted that Micron's gross margin exceeded 84%, surpassing Nvidia's 74%, and the company forecast gross margin of 86% for the current quarter, suggesting high profitability may persist.

The results revived euphoria around AI-related stocks after weeks of concern that the sector might be due for a correction. "We are seeing no cracks in AI demand on the chips/hardware or software front which gives us a bright green light to own the core tech winners into year-end," Wedbush analyst Dan Ives said in a research note, as reported by Nasdaq.

Barclays global chair of research Ajay Rajadhyaksha, addressing worries about a cyclical bust in semiconductors, told Zero Hedge: "At the risk of using the four most dangerous words in finance, this time is different. Earnings have exploded, order books are full into 2027, and forward multiples are eminently reasonable."

Market divergence: AI plays up, megacaps down

Despite the surge in semiconductor stocks, the so-called "Magnificent Seven" megacap technology companies that fund much of the AI buildout were mostly lower in premarket trading. Microsoft, Amazon, Meta, Apple, and Alphabet all edged down, according to Zero Hedge.

The divergence underscores a rotation within the tech trade: investors piling into pure-play semiconductor beneficiaries while taking profits in the hyperscalers that have already rallied sharply this year.

Qualcomm also provided a major lift to the sector, gaining 12% premarket after projecting more than $15 billion in annual revenue by fiscal 2029 from AI components in data centers. The chipmaker raised its fiscal 2029 non-handset revenue target to $40 billion and announced a strategic relationship with Hugging Face, Zero Hedge reported.

Korea's KOSPI index rallied 5.5% overnight, driven by Micron peers SK Hynix and Samsung Electronics, though it closed well off the highs and remains about 2.4% below pre-Flash Crash levels.

Oil eases, bond yields steady

The rally in tech contrasted with weakness in cyclical and defensive sectors. Banks were flat, regional banks lower, energy shares down with crude, consumer discretionary mixed, and materials flat. Within defensives, staples were weaker and healthcare mixed, while AI-related utilities names were higher, Zero Hedge said.

Brent crude dropped 1.4% to below $73 a barrel, erasing all Iran-related war gains on fears of a supply glut following a ramp-up in flows through the Strait of Hormuz.

Bond yields were flat to 2 basis points higher as the yield curve steepened, while the U.S. dollar started the session lower for the first time in six sessions.

Supply constraints underpin long-term optimism

Micron has secured 16 contracts with customers, including data centers and automakers, in the three- to five-year range that could bring in $22 billion, providing solid revenue visibility, according to the Nasdaq report. Analysts at UBS have said DRAM is likely to be constrained until at least halfway through 2028 and NAND until at least the end of 2027.

Still, not all analysts are convinced the memory sector has shed its cyclical nature. Bernstein analyst Mark Newman, cited by Nasdaq, said Micron's new strategic customer agreements could include pricing ceilings that limit how much the company can raise memory prices. "We wonder if the ceiling suggests limited headroom," he wrote in a research note.

Other notable movers

In other premarket action, Bio-Techne climbed 20% after Merck agreed to acquire the company for $73 per share in cash. BlackBerry shares rose 8% after boosting its full-year revenue forecast. Dollar Tree fell 5% after Mantle Ridge and another stockholder sold 12.8 million shares to JPMorgan and Goldman Sachs. IBM gained 3% after unveiling the world's first sub-1 nanometer chip technology. Wendy's climbed 13%, extending a rally after gaining 26% on Wednesday on meme-stock interest.

Trip.com ADRs dropped 13% after first-quarter adjusted earnings missed estimates and the company guided to slower second-quarter revenue growth. ARS Pharmaceuticals sank 23% after providing updates on payer access for its FDA-approved epinephrine nasal spray.

The U.S. economic data calendar includes May personal income and spending, a first-quarter GDP revision, May durable goods orders, weekly jobless claims, and the May Chicago Fed national activity index. Fed speakers scheduled include Bowman, Goolsbee, and Williams.