The AI Trade Lost $1 Trillion. Then Micron Spoke.
GOOD MORNING, Wall Street spent Wednesday selling expensive tech — then the chip trade snapped back after the bell. Micron and Qualcomm delivered forecasts strong enough to add roughly $400 billion in market value across semiconductor stocks, a sharp reversal after more than $1 trillion had been erased from the Nasdaq-100 during the week's AI selloff. Outside tech, housing sent a less celebratory signal: new-home sales fell again as mortgage rates kept buyers on the sidelines. MARKETS | TLDR
AI DEMANDThe AI Trade Lost $1 Trillion. Then Micron Spoke.The regular session looked like another bad day for the AI trade. The Nasdaq fell, several megacap technology stocks weakened and Reuters estimated that more than $1 trillion in market value had been erased from the Nasdaq-100 during the week's selloff as investors worried about valuations, debt-backed hyperscaler spending and a more hawkish Fed. Then Micron reported. The memory maker forecast roughly $50 billion in fiscal fourth-quarter revenue, far above Wall Street's $43.58 billion estimate, and said customers had committed about $22 billion to secure future memory supply. Qualcomm added another signal, projecting $15 billion of annual data-center chip revenue by 2029 as it pushes beyond smartphones. Semiconductor stocks added more than $400 billion in market value in extended trading. The two moves illustrate the split now defining AI markets. Investors are questioning the economics of the companies funding hundreds of billions of dollars of AI infrastructure, while suppliers receiving that spending continue to report extraordinary demand. Micron and Qualcomm did not resolve the AI ROI debate. They did show that, at least for the companies selling the picks and shovels, the spending cycle is still accelerating. HOUSINGHousing Has 10 Months of Supply — and Still Isn’t AffordableSales of new U.S. single-family homes fell 7.3% in May to a seasonally adjusted annual rate of 580,000, the lowest level since January and the second consecutive monthly decline. Mortgage rates remained elevated after rising with oil-driven inflation and Treasury yields, while the median new-home price held near $424,900. The more revealing number is inventory. Builders had 496,000 new homes for sale, equal to 10.3 months of supply at the current sales pace — the highest since 2009. Normally, that much inventory would suggest buyers have leverage. Instead, high borrowing costs and elevated prices are keeping demand weak even as builders cut prices and offer incentives. That makes housing an important signal for the broader economy. The problem is no longer simply a shortage of homes; it is the monthly payment required to buy one. Nearly half of consumers surveyed by Bank of America cited high interest rates as a reason to delay a purchase, and 58% pointed to high home prices. Until financing costs come down, more inventory alone may not be enough to produce a meaningful housing recovery. HEADLINES
UPCOMING
DEEP INSIGTHSMicron Q3 2026 ResultsMicron's primary-source results show the scale of the AI memory boom better than the stock move alone. Cloud-memory revenue reached $13.77 billion with an 83% gross margin, while core data-center revenue reached $11.52 billion with an 87% gross margin. The numbers explain why suppliers can thrive even while investors question the economics of the companies funding the buildout. May New Residential SalesThe housing release is useful because it shows both sides of the affordability problem at once: sales are falling while available inventory is rising. A 10.3-month supply — the highest since 2009 — would normally favor buyers, but mortgage rates and prices remain high enough to keep many households out of the market. |