AI stocks in focus after Micron’s blowout earnings ease infra fears

A wave of optimism swept through the technology sector on Thursday as chipmaker Micron Technology delivered stronger-than-expected quarterly results, providing a much-needed "glimmer of hope" for artificial intelligence (AI) investors following weeks of lackluster performance.

Micron Leads the Charge

Micron emerged as the S&P 500's top performer for the day, with shares surging more than 10%. The company significantly outperformed quarterly earnings estimates, a feat executives attributed to a massive supply shortage and booming demand from data centers for high-bandwidth memory chips.

During the earnings call, the company leadership revealed that Micron is effectively sold out of its HBM chips through 2026, signaling that the hunger for AI infrastructure shows no signs of slowing.

Market Reacts

The positive sentiment extended well beyond Micron, lifting several AI and related stocks.

Sandisk and Western Digital saw respective jumps of 6% and 5%.

Nuclear provider Constellation Energy and software firm Applovin both traded sharply higher after facing recent downward pressure.

Oracle Deal

Oracle managed a modest recovery, finishing up approximately 1%. The software giant had previously slumped over 5% earlier in the week following reports of financing troubles regarding its data center expansions.

Investors also noted a new deal involving Oracle, Silver Lake, and Abu Dhabi-based MGX with social media platform TikTok, according to a AFP report citing an internal memo from TikTok CEO Shou Chew.

Nvidia Buys AI Software Provider

As the AI rally — historically led by Nvidia — hit turbulence last month, the chip giant is taking strategic steps to maintain its market dominance. Nvidia recently announced the acquisition of AI software provider SchedMD.

The move is seen as a tactical push into open-source technology. While Nvidia is renowned for its hardware, analysts suggest its proprietary CUDA software remains its primary "moat." By investing in the broader AI software ecosystem, Nvidia aims to fend off rising competition and prove the long-term utility of its hardware.

Investor Sentiments

Despite Thursday’s gains, investors are moving away from speculative hype and are increasingly seeking tangible benefits and evidence of return on investment.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited said: “Concerns surrounding a possible AI tech bubble burst sometime in 2026 have been weighing on AI stocks. But results of companies like Micron, and Nvidia, earlier, came much better than expected. This trend of rising earnings, particularly in the context of valuations that can be justified, is triggering renewed interest in AI stocks whenever positive news emerge. It appears that the AI story is not yet over.”

While Broadcom recently showed a booming AI business, Wall Street focused heavily on profit margin impacts. Similarly, Oracle’s recent volatility — including a 45% decline from previous highs — reflects growing anxiety over the risk of AI infrastructure overbuilding and the debt-heavy financing of massive data projects.

Analysts suggest that Micron’s results have successfully reinvigorated the AI buildout narrative, at least for the short term, by proving that demand for the physical building blocks of artificial intelligence remains at record levels.

“Micron’s earnings provided a data point for the AI trade at a time when markets were looking for confirmation beyond headline narratives. The company reported fiscal Q1 revenue of $13.6 billion, up 57% year-on-year, with DRAM revenue rising 69% to $10.8 billion, reflecting higher pricing and volumes linked to AI data-centre demand,” said Viram Shah, Founder & CEO, Vested Finance.

“From a sector perspective, this matters because memory sits downstream in the AI infrastructure chain. Strength at this level suggests that spending by hyperscalers and enterprises on AI workloads continues, even as overall technology capex remains selective. That helped support sentiment across AI-linked stocks, including semiconductor and large platform companies,” Shah added.