Micron's spy stock move jumped more than 17% on Thursday after record-setting quarterly results and a stronger-than-expected outlook revived demand for AI-linked shares. That helped pull the Nasdaq Composite, the S&P 500, and the Dow Jones Industrial Average higher even as May inflation data kept interest-rate pressure alive.
More than 17% was the size of Micron's share gain after the company posted a sizeable earnings beat and guided above expectations. For investors in AI-linked stocks, that kind of move matters because it reset the near-term debate around whether demand for chips and related hardware is still strong enough to justify recent valuations.
Nasdaq Composite Gains 0.9%
0.9% was the Nasdaq Composite's advance on Thursday, with the S&P 500 up 0.8% and the Dow Jones Industrial Average rising 0.7%. Tech stocks moved higher after Micron's results helped boost confidence in the AI trade, reversing some of the pressure that had built during several tough days for Wall Street stocks.
$15 billion was the new revenue target Qualcomm set as it moved beyond smartphones into data center products such as chips and servers. Qualcomm's stock rose about 10% after that announcement, adding a second lift to the AI complex and giving traders another data point on where spending is headed outside the handset business.
May PCE Hits 4.1%
4.1% was the year-over-year rise in the Personal Consumption Expenditures Index in May, with the gauge also up 0.4% month over month. The May PCE reading came in line with expectations on the annual measure and slightly below expectations on the monthly measure, a combination that softened the blow from higher consumer and wholesale prices earlier in the month.
The Federal Reserve uses the Personal Consumption Expenditures Index as its preferred inflation measure, so the report left the rate-hike debate in play even as stock buyers leaned into AI names. Micron's rally and the market's relief over AI demand came even as inflation heated up again in May, which is the friction traders are still pricing around.
Micron and the AI test
Whether the stronger AI-related demand signaled by Micron lasts beyond this earnings report is the unresolved question now sitting in front of Wall Street. Thursday's move gave investors a clean read on what can happen when a chip maker beats on earnings and outlook at the same time inflation data arrives on the same day.
