Key facts
- Micron Technology forecasts Q4 revenue between $49 billion and $51 billion, surpassing analyst estimates of $43.58 billion.
- Micron's stock surged 14% in after-hours trading following the positive forecast.
- Demand for AI infrastructure and memory chips is driving Micron's strong outlook.
- Qualcomm expects $15 billion in sales from its data center business by 2029.
- The PHLX chip index remains up 90% year-to-date, despite recent weakness.
Micron Technology's stock surged 14% in after-hours trading after the memory chip maker forecast fourth-quarter revenue between $49 billion and $51 billion, significantly exceeding Wall Street's consensus estimate of $43.58 billion. The company attributed its robust outlook to the soaring demand for AI infrastructure and memory chips, a trend that has seen Micron's stock gain 267% year-to-date.
Qualcomm also boosted sentiment, forecasting $15 billion in sales from its data center business by 2029 as it expands beyond smartphones into AI. These strong forecasts from Micron and Qualcomm breathed fresh life into the AI stock rally, adding over $400 billion in market value to chipmakers. Competitors like Western Digital, Sandisk, and Seagate Technology jumped more than 8%, while Arm Holdings rallied 6%, Marvell added almost 4%, and Broadcom climbed 2%. Semiconductor equipment suppliers Applied Materials and ASML also rose over 4%.
The blowout forecasts follow recent concerns on Wall Street that valuations for AI-related companies had become stretched, leading to a 8% tumble in the PHLX chip index on Tuesday. However, even after this week's weakness, the PHLX chip index remains up 90% year-to-date.