Technology stocks rebounded on Thursday after a blowout earnings report from Micron Technology reassured investors about the durability of demand for artificial-intelligence hardware, sparking a relief rally that lifted chipmakers on both sides of the Atlantic. The bounce came just days after a sharp global selloff in tech shares, and set the stage for a key US inflation reading later in the day.
US stock futures pointed firmly higher in early trading. Contracts tied to the tech-heavy Nasdaq 100 climbed more than 2%, while broader S&P 500 futures rose and the more industrially weighted Dow also advanced, a reversal of the risk-off mood that had gripped markets earlier in the week. The catalyst was Micron, whose shares jumped sharply after the memory-chip maker reported fiscal third-quarter results that comfortably beat expectations and issued guidance well above what analysts had penciled in.
The company posted record quarterly revenue and pointed to continued strength ahead, guiding to fourth-quarter sales of roughly $49 billion to $51 billion, far above the consensus near $43 billion, and to earnings that also outstripped forecasts. Management said supply constraints in the memory market showed little sign of easing, with high-bandwidth memory, the specialized chips that sit alongside AI accelerators, already booked up and demand for conventional memory tightening as a result. The company highlighted high-volume shipments of its latest high-bandwidth memory for a lead customer platform and progress on next-generation products, alongside heavy capital spending and strong cash generation.
The read-through for the rest of the sector was immediate. Qualcomm rose after lifting its longer-term revenue guidance for its non-handset business, and a string of other chip and chip-equipment names, including Sandisk, Western Digital, Lam Research, KLA and Applied Materials, gained in sympathy. The strength carried into Europe, where semiconductor-equipment makers advanced and Germany's benchmark index rebounded, helped along by lower oil prices as well.
The tone marked a notable shift from earlier in the week, when fears about whether the enormous investment in AI infrastructure would pay off, combined with worries over a hawkish Federal Reserve, had triggered a steep selloff led by Asian chipmakers. Micron's results spoke directly to the first of those concerns. Analysts framed the report as evidence that the memory and chip trade remained intact and still early in its arc, with one brokerage noting that the question hanging over the sector had been less about demand than about how durable it would prove, a risk the strong numbers and long-term supply commitments helped push further out.
Attention now turns to the inflation data. The May reading of the personal consumption expenditures price index, the Federal Reserve's preferred gauge of inflation, was due before the US open, and investors were watching closely for any signal on the path of interest rates. A hotter-than-expected print could revive the rate worries that have unsettled high-multiple growth stocks, while a softer reading would reinforce the relief rally.
For now, the rebound offered a reminder of how quickly sentiment can swing in a market dominated by a handful of AI-linked names. Whether the recovery holds is likely to depend on the inflation figures and on whether the optimism generated by one company's results can outweigh the broader macro concerns that drove the recent turbulence.