Micron (MU 9.60%) stock rose in Tuesday's trading. The memory technologies company's share price climbed 4.7% in the daily session. Meanwhile, the S&P 500 (^GSPC 0.39%) gained 1.1%, and the Nasdaq Composite (^IXIC 0.73%) climbed 1.4%.
Micron's valuation got a boost today as macroeconomic and geopolitical developments pointed to a more favorable backdrop for investors. Excitement surrounding the company's quarterly report tomorrow may have also factored into the valuation move.
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Micron stock rises on more favorable macroeconomic and geopolitical outlook
Federal Reserve Chair Jerome Powell said today that the central bank would continue to monitor tariff and inflation dynamics before committing to cutting interest rates, but he also left the door open for a rate reduction next month. Along with other recent comment from Fed officials, Powell's statements today bolstered investor hopes for a rate cut next month and helped send the broader market higher.
Investors were also relieved to see the announcement of a ceasefire in the war between Israel and Iran. In addition to being a potential source of outcomes that could drive inflation higher, investors have shown signs of concern that military actions between the two countries could spiral into a much wider conflict that would destabilize markets. With a ceasefire now in place, Micron and other stock stocks received valuation boosts as buyers became less risk-averse.
What's next for Micron?
After market close tomorrow, Micron will publish results for the third quarter of its current fiscal year, which concluded May 30. The average Wall Street analyst estimate calls for the business to report non-GAAP (generally accepted accounting principles) adjusted earnings per share of $1.61 on sales of $8.85 billion. With the last update from Micron, the company guided for adjusted earnings per share to be between $1.47 and $1.67, and for sales to be between $8.6 billion and $9 billion.
While the company is expected to see relatively soft sales for its NAND memory chips, analysts are expecting strong performance for high-bandwidth-memory (HBM) and other DRAM solutions. With AI-focused HBM products potentially making up a bigger portion of Micron's sales mix, sales for these higher-margin products could push Micron to a stronger-than-expected earnings performance in the period.
