Breakfast News: Is Micron the New 'Market Maker'?

Breakfast News: Is Micron the New 'Market Maker'?

June 25, 2026

| Wednesday's Markets | | --- | | S&P 500 7,358 (-0.1%) | | Nasdaq 25,477 (-0.43%) | | Dow 51,849 (+0.35%) | | Bitcoin $60,757 (-2.64%) |

Source: Image created by Jester AI.

1. Micron Pops on Data Center Demand

Micron (MU 0.11%) rose around 17% ahead of the market open as quarterly results showed exceptional demand, with core data center business sales climbing more than sevenfold versus last year, as the memory supply crunch remains a focal point.

• "Our customers are recognizing that supply shortages in memory and storage will take considerable time to improve": CEO Sanjay Mehrotra now expects industry supply to improve only in 2028, with data center operators and other clients now signing three- to five-year deals with Micron to secure capacity.
• **Gross margin came in ahead of expectations at 84.56%: **Micron's profit margin indicates the unprecedented pricing power it currently has due to the global shortage of memory chips, along with the operational leverage from production. A year ago, the gross margin stood at 39%.

2. Global Chip Stocks Lift Market Sentiment

Nasdaq futures jumped about 2%, with AI chip stocks benefiting from Micron's tailwind and a rebound in positive sentiment from Asia. Korean chip giant SK Hynix rose 13% as plans to raise funds from a U.S. stock listing gained momentum.

• SK Hynix listing could be a double-edged sword for Micron: Given the cheaper relative valuation of SK Hynix, a U.S. listing could see capital flow from Micron into the stock. However, it could boost overall exposure for the sector, a net benefit for Micron stock.
• **"I'm struck by the idea that they are claiming a historically cyclical hardware market is not anymore": **In May, Fool contributing analyst Toby Bordelon mused about a UBS (UBS +0.48%) report on chip stocks, noting the theme that "this time, it's different," but ultimately warned "I am concerned about the valuation of Micron itself."

3. Wall Street Passes Fed Stress Test

Major U.S. banks including JPMorgan (JPM +0.28%), Goldman Sachs (GS +0.33%), and Hidden Gems rec U.S. Bancorp (USB +1.11%) passed the Federal Reserve's annual stress test, with enough capital requirements to deal with a weak economy, boosting confidence in the sector.

• Results "underscore the strength of the banking system": Michelle Bowman, the Fed vice chair for supervision, praised the results. It modeled scenarios including a 10% unemployment rate, a double-digit real estate price fall, and plunging stocks.
• **Host of major banks lift dividends and buybacks after announcement: **U.S. Bancorp confirmed plans to raise its quarterly dividend by 3.8% to $0.54 per share. The stock is outperforming the S&P 500 by almost 18% since the July 2023 Hidden Gems rec. Typically, banks make payout changes following the results as management teams have better visibility on excess cash after regulators dictate how much capital they need to set aside first.

4. Next Up: Earnings and Inflation in Focus

• McCormick (MKC +2.10%) rose around 2.5% before the market opened as Q2 results built on last quarter, with net sales up by 16.7% and management reaffirming the full-year earnings per share outlook.The stock is currently on hold in Stock Advisor by Team Rule Breakers.
• The May reading of the Fed's preferred inflation gauge, the core Personal Consumption Expenditures (PCE) price index, is projected to climb to 3.4% year over year, up from 3.3% in April. The headline figure is expected to hit 4.1%, the highest level since April 2023.

5. Today's Take: Separating AI Doers From Talkers

Before determining if a company is genuinely using a technology, I check where we are in the Gartner hype cycle. Anywhere before the trough of disillusionment means a fair amount of skepticism is warranted.-- Alicia Alfiere Team Rule Breakers

6. Your Take

What's one investment thesis you're questioning after this month's events?

Debate with friends and family, or become a member to hear what your fellow Fools are saying!