NVDA, AMD and INTC expected to rally as Micron surges 13%

The sell-off in chip stocks may prove short-lived. Micron Technology's blockbuster earnings, which sent shares up 13% in after-hours trading, is expected to lift the entire semiconductor sector on Thursday.

"Taking a step back we continue to believe that in this market we will continue to go through a number of 'gut check moments' in the tech trade," Wedbush analysts led by Dan Ives wrote in a report, describing this week's sell-off as a healthy pause rather than a reversal.

Micron reported adjusted earnings of $25.11 per share for its fiscal third quarter on revenue that more than quadrupled year-over-year to $41.46 billion, topping the $21.05 EPS and $36.28 billion in revenue analysts had expected. Its margins surged to 84.6%, from 74.4% the prior quarter and 37.7% a year ago, as the chipmaker raised prices during an industrywide shortage of memory components. The company forecast current-quarter revenue of $49 billion to $51 billion and adjusted EPS of $30 to $32, also ahead of projections.

The rebound in chip stocks matters because semiconductors have been the primary engine of the S&P 500's gains this year. JPMorgan raised its year-end S&P 500 target to 7,800 on Wednesday, citing "unprecedented" earnings strength driven by AI-related capital expenditure. Nvidia, Advanced Micro Devices and Intel — three of the most closely watched chip stocks — stand to benefit directly from renewed appetite for semiconductor exposure as investors rotate back into the sector following this week's pullback.

Micron's Results Set the Tone for the Sector

Micron's performance is a bellwether for the broader chip industry. The memory chipmaker, which has seen its stock rise nearly 270% in 2026 through Wednesday's close, is one of the best-performing stocks in the S&P 500 this year. Its after-hours surge suggests shares could return to levels near Monday's record high, potentially lifting peers in the process.

The memory shortage driving Micron's results is not limited to one company. SK Hynix, the South Korean memory giant and Nvidia partner, said Wednesday it plans to list on the Nasdaq as soon as July 10 with the ticker "SKHY," in a deal that will raise $29.65 billion. The company holds nearly 60% of the global market for high-bandwidth memory, according to Counterpoint Research. SanDisk, another memory maker, has seen its stock gain 737.7% in 2026, with Morgan Stanley analysts saying the company believes AI is "fundamentally changing" the NAND market.

Why This Week's Sell-Off May Be a Buying Opportunity

This week's decline — which saw the Nasdaq Composite fall for three straight days and chip stocks tumble from record highs on Tuesday — was driven by concerns about elevated interest rates and crowded bets on momentum names. The Federal Reserve last week left rates unchanged but new Chair Kevin Warsh delivered a hawkish stance, leading traders to price in at least one rate hike by year-end, according to CME Group's FedWatch tool.

But analysts across Wall Street view the pullback as a necessary correction in an otherwise strong uptrend. Morgan Stanley Investment Management senior portfolio manager Andrew Slimmon described the recent action as "good for the markets," saying it prevents the kind of euphoria that ends rallies badly. The decline in oil prices to their lowest since the Iran war began — West Texas Intermediate fell nearly 5% to $69.80 a barrel on Wednesday — also removes a key source of inflation pressure that had been weighing on rate-sensitive growth stocks.

Investment Angle

For investors, the question is whether this week's sell-off represents a buying opportunity or the start of a deeper correction. Nvidia shares, which fell 0.5% on Wednesday, trade at elevated multiples reflecting the AI boom. Micron's strong guidance suggests demand for AI-related memory remains strong, supporting the thesis that the semiconductor cycle still has room to run. JPMorgan warned, however, that extreme crowding in momentum shares like chip stocks amplifies the risk of a flash crash, and that a wave of new supply from upcoming IPOs — including OpenAI and Anthropic — could pressure valuations.

This article is for informational purposes only and does not constitute investment advice.