US Stocks Mixed: Micron Surges on AI Optimism While Apple Slides
US stock markets displayed a divergent trend on Thursday as the artificial intelligence boom provided a much-needed cushion for the Dow Jones, even as the Nasdaq struggled. While semiconductor giants saw significant gains, consumer tech leader Apple faced headwinds following news of product price hikes.
Micron and Qualcomm Drive AI Rally
The semiconductor sector acted as the primary engine for market gains, helping to ease investor fears regarding the potential overvaluation of AI-linked stocks. Micron Technology emerged as the standout performer, with its shares surging 9.7%. This rally was fueled by quarterly profit and revenue figures that comfortably exceeded Wall Street estimates, coupled with a robust revenue forecast for the current quarter.
The optimism extended to Qualcomm, which saw its stock rise 3.1%. The chipmaker provided an ambitious long-term growth forecast, projecting that the rapid expansion of AI will help double its non-smartphone revenue—including data center segments—to USD 40 billion by fiscal 2029. This sentiment was mirrored in Asian markets, where South Korea's Kospi jumped 5.4%, driven by a 13.1% surge in SK Hynix.
Apple Faces Pressure from Price Hikes
In contrast to the chipmakers, Apple shares tumbled 4.8% during morning trade. The decline comes on the back of reports that the tech giant is implementing price increases across several product lines. Specifically, analysts noted hikes of 15% to 20% for Mac computers.
The company is facing a dual challenge: managing consumer sensitivity to higher prices while navigating rising input costs. The same semiconductor boom driving Micron's profits is simultaneously increasing the cost of memory and storage for device manufacturers like Apple, squeezing their margins and contributing to the necessity of these price adjustments.
Inflation Data and Treasury Yields Stabilize Markets
Broader market sentiment was supported by recent macroeconomic data. The US Personal Consumption Expenditures (PCE) index, a key inflation gauge, showed an acceleration to 4.1% in May from 3.8% in April. However, because this figure aligned with economists' expectations, it provided a sense of predictability to the markets.
This stability was reflected in the bond market, where the yield on the benchmark 10-year US Treasury eased to 4.36%, down from 4.41% on Wednesday and 4.56% earlier this month. Additionally, Brent crude prices saw a slight dip to USD 73.81 per barrel, retreating from previous highs seen during geopolitical tensions, which has helped moderate inflationary concerns.
Key Takeaways
- AI Sector Resilience: Strong earnings and optimistic revenue forecasts from Micron and Qualcomm are validating the AI rally and easing fears of a bubble.
- Tech Divergence: While semiconductor firms benefit from rising component costs, consumer electronics giants like Apple are feeling the pressure of both rising input costs and necessary retail price hikes.
- Macroeconomic Stability: Inflation data meeting expectations and easing Treasury yields have provided a stabilizing backdrop for investors amid market volatility.