Investors on Wall Street are awaiting the results of Micron Technology, scheduled for release on 24 June, viewing them as an important test of the strength of momentum driven by artificial intelligence investments in US markets, amid growing questions about whether the current rally still has the fundamentals to continue or whether it is approaching its peak.
Despite the sharp sell-off that hit markets mid-last week — according to Reuters' weekly US equities report — major US indices continue to hover near record levels, supported by strong corporate earnings stemming from the AI spending boom, alongside an easing of concerns related to the Iran conflict.
Micron shares have risen approximately 298% since the start of the year, making its upcoming quarterly results a focal point for investors seeking to assess whether surging data centre spending and semiconductor company profits can continue to beat expectations in the periods ahead.
Andy Pratt, director of investment strategy at Burney Company, said the AI sector's momentum remains strong, adding that the earnings-surprise indicators his firm tracks point to continued significant growth opportunities within the sector.
He noted that the AI-related trend is still intact and is giving companies additional room to outperform estimates.
Apple, Intel and chips
In a development that lent further support to the sector, Apple announced a cooperation agreement with Intel to design and manufacture chips inside the United States — a move seen as potentially bolstering the American company's efforts to reclaim its standing in the semiconductor industry.
The announcement helped support the S&P 500, which rose approximately 1% during the week, heading toward a second consecutive week of gains.
At the same time, the Philadelphia Semiconductor Index hit a new record high, rising approximately 7% over the past week, in a direct reflection of investor optimism about the sector's future.
Micron's results carry added significance given elevated stock valuations and mounting concerns that the current rally may have reached excessive levels.
Analysts argue that any signals confirming sustained strong demand for chips or the resilience of AI-related spending will give investors additional confidence to keep pouring money into the market.
Steve Kolanovic, chief investment officer at Integrated Partners, described Micron's forthcoming results as potentially creating a new