Bionic Micron! Memory Stocks Surge; 10K Portfolio Blasts Off
Micron’s now a $1T market-cap stock; $10K Portfolio rockets up 25.7% since its start; memory basket names make big gains.
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As if Micron Technology (MU) was not already one of America’s most valuable companies. There is no doubt about that now. On Tuesday morning, UBS analyst Timothy Arcuri reiterated a “buy’ rating on the shares of Micron while increasing his target price from $535 to $1,625. We covered this event in depth here at TheStreet Pro on Tuesday while providing a technical look at that stock. Why this was such a huge deal is the fact that Arcuri is such a highly regarded sell-side analyst.
No, regular viewers of financial media might not readily recognize him. That’s because he’s busy doing his job and doesn’t spend the bulk of his time canvasing the public for sales or attention. Arcuri is rated by TipRanks as the No. 2 analyst on all of Wall Street out of the 12,268 analysts rated by that service. Over the past two years, Arcuri’s success rate stands at 86% with an average return of 99.4%. Over one year, his average return is still 56.6%. This guy has been right more consistently than just about anyone else. That’s why his huge target price increase mattered to the degree it did.
Micron Joins the Elite
Micron ran on Tuesday, ran like the wind. The stock soared 19.3% for the day’s regular session (and kept going overnight) to close at $895.88. There was plenty of “pin action” as Micron joined an elite group and dragged other groups higher with it. First, about joining the elite. Micon closed out the Tuesday session with a market cap of $1.01 trillion. The move substantiated the investing public’s growing conviction that AI-driven demand for high-bandwidth memory still has a long way to run.
Micon is the 11th U.S. company to reach the $1 trillion milestone in terms of market capitalization. Nvidia (NVDA) remains the nation’s most valuable company at $5.3 trillion, followed by Alphabet (GOOGL), (GOOG) at $4.6T, Apple (AAPL) at $4.53T and Microsoft (MSFT) just above $3T. Amazon (AMZN) is worth a rough $2.85T at the moment, while Broadcom (AVGO) is worth about $2T. Rounding out he trillion dollar club are Tesla (TSLA), Eli Lilly (LLY), Meta Platforms (META), Berkshire Hathaway (BRK.A), (BRK.B) and now Micron. Who might be the next large American firm to join this group? Walmart (WMT) is now the closest, with JP Morgan Chase (JPM) and Advanced Micro Devices (AMD) close enough to at least talk about.
Coattails
Micron did not rally alone on Tuesday. As technology investors (a.k.a. hedge funds and mutual funds) rotated out of software and into nearly every other part of the tech sector, the rally spread to other closely associated groups.
The Memory / Storage Basket… Western Digital (WDC), SanDisk (SNDK), and Seagate Technology (STX) rallied for gains of 8.3%, 7.5% and 4% respectively.
Chip Designers… On Semiconductor (ON), AMD, Marvell Technology (MRVL), and Arm Holdings (ARM) added 9.3%, 7.8%, 6% and 4.8% in that order.
Chip Equipment Manufacturers… KLA Corp (KLAC), Lam Research (LRCX) and Applied Materials moved 6.5%, 5.7% and 5.3% higher respectively.
The Final Frontier
Tuesday’s rally was not about Micon and high tech alone. The “space” trade is about as hot as it can get as well. On Tuesday, as enthusiasm for Elon Musk’s SpaceX IPO grows, NASA selected Jeff Bezos’ Blue Origin (which is not publicly traded) among several other operations to jump start the agency’s lunar base program.
That’s right. NASA has announced a $30 billion program to establish a permanent human presence on the moon’s south pole by 2036. This increased spending on moving humans further into space comes alongside the U.S. Space Force and its now $78 billion budget for fiscal 2027, which will be 78% increase from fiscal 2026.
Among publicly traded companies that popped on that news are Redwire (RDW) and Sidus Space (SIDU). Those two names gained 26% and 21.1% respectively on Tuesday as Firefly Aerospace (FLY) added 18.8%, Planet Labs (PL) added 9%, Rocket Lab (RKLB) added 5.5% and MDA Space gained 3.9%. Sidus Space, Planet Labs and Rocket Labs are all Sarge-folio holdings as well as being members of TheStreet Pro’s $10K Portfolio, which I manage. That portfolio, created on March 24, is already up 25.7% since its inception. The S&P 500 is up 14.3% over that same time frame, while the Russell 2000 (our “sort of” benchmark) is up 17.1%.
Marketplace
Nearly all of the U.S. market’s mid-major to major equity indices rallied nicely on Tuesday with the exception of the Dow Industrials, which really has not counted as a serious index since the mid-1990s anyway. As Crude Oil sold off hard and Treasury debt securities rallied sharply (forcing yields lower), the Nasdaq 100, Nasdaq Composite and S&P 500 gained 1.76%, 1.19% and 0.61% respectively. The Dow Transports gained 2.13% as all of the small to midcap indices added between 1.46% and 1.79%. The big dog among the indices though, was the Philadelphia Semiconductor Index. That mis-major gained 5.53% on Tuesday.
Just six of the 11 S&P sector SPDR ETFs ended the day in the green, but it was how they lined up that mattered. Growth and cyclical sectors clearly outperform defensive sectors which could potentially be taken as a positive sign for current and future US economic activity. Psst… the Atlanta Fed’s GDPNow model shows Q2 growth at 4.3% q/q, SAAR. The Cleveland Fed’s model shows Q2 growth of 3.27% while New York shows 2.61%. Nobody with a pulse is even close to predicting anything other than an upside acceleration for the US economy at this point. That’s a nice change from our very recent past.
Winners beat losers on Tuesday by a two-to-one margin at the NYSE and by a rough seven-to-four margin at the Nasdaq. Advancing volume took a 69.4% share of composite Nasdaq-listed activity on Tuesday and a 63.7% share of composite NYSE-listed trade as well. Aggregate trading volume showed gains on a day over day basis across the membership of the S&P 500, the listings of the NYSE (+11%) and those names listed at the Nasdaq (+4.9%).
Charting What This Means…
Yes, ladies and gentlemen… we have yet another technical reconfirmation of the current bullish trend. Uh-huh… despite the sloppy look we see in the S&P 500’s daily moving average convergence divergence. Just look at that Relative Strength Index!
Relative Strength has been flashing at or close to a technically overbought condition since mid-April. You know what happens when an overbought condition becomes entrenched, right? That’s why we say that “the trend is your friend.”
The lake Isle of Innisfree
I will arise and go now, for always night and day
I hear lake water lapping with low sounds by the shore;
While I stand on the roadway, or on the pavements grey,
I hear it in the deep heart’s core.
– William Butler Yeats (1888)
Economics
(All Times Eastern)
07:00 – MBA 30 Year Mortgage Rate (Weekly): Last 6.56%.
07:00 – MBA Mortgage Applications (Weekly): Last -2.3% w/w.
08:15 – ADP Employment Change (weekly): Last 42.25K.
08:55 – Redbook (Weekly): Last 8.1% y/y.
10:00 – Richmond Fed Manufacturing Index (Dec): Expecting 4, Last 3.
4:30 p.m. – API Oil Inventories (Weekly): Last -9.1M.
The Fed
(All Times Eastern)
04:00 – Speaker: Dallas Fed Pres. Lorie Logan.
10:25 – Speaker: Chicago Fed Pres. Austan Goolsbee.
8 p.m. – Speaker: Federal Reserve Vice Chair Philip Jefferson.
Today’s Earnings Highlights
(Consensus EPS Expectations)
Before the Open: ANF (1.28), DKS (2.91)
After the Close: MRVL (.79), CRM (3.13), SNOW (.32)
At the time of publication, Guilfoyle was long MU, NVDA, AMZN, AMD, WDC, SNDK, STX, PL, RKLB, SIDU equity.
