Nasdaq Index: Micron’s AI Outlook Ends Chip Selloff, Lifts Tech Stocks

Micron’s Outlook Turned the Entire Chip Selloff Around

The chip sector spent two days selling off and Micron’s Wednesday night report reversed the tone in a single after-hours session. The stock jumped 15.81% to $1,214.27 at 04:00 GMT Thursday after management told investors that AI demand is outpacing supply and the conditions driving it are not going away for years. The market did not react to the quarterly beat. It reacted to what Micron said about the next several years of memory demand.

Micron locked in $22 billion in customer commitments and the supply side still cannot keep up with demand. That is not a company worried about AI spending getting ahead of itself.

Tuesday’s Sellers Have a Problem Now

Tuesday’s 13% decline and Wednesday’s follow-through looked like the start of a real reassessment of chip valuations. Then Micron reported after the close and the after-hours move erased the entire two-day selloff and put the stock above the June 22 high. Every fund that sold chips Tuesday is staring at a gap higher Thursday morning with a decision to make.

The question driving the selloff was whether AI spending was getting ahead of itself. Micron’s CEO Sanjay Mehrotra’s answer was sixteen customers putting down $22 billion in cash deposits and locking into five-year take-or-pay contracts with pricing floors. Data center, consumer electronics, automotive buyers, all fighting for the same allocation. The remaining obligations tied to those deals run to roughly $100 billion. That is not a forecast number. That is revenue on the books.

Qualcomm muddied it slightly. The company said this week its new AI chips are designed to run with less expensive memory, and if competing architectures reduce the premium on high-bandwidth memory over time, Micron’s margins face a question that is not going away. Mehrotra pointed back at the contracts. Buyers are locking in at current pricing because they do not believe alternatives show up at scale, and the way I see it, $22 billion in cash deposits is a stronger argument than a product announcement from a competitor.

The stock tripled in 2026 on the AI trade before this week’s selloff. Now it has $100 billion in contracted obligations underneath. Micron is the only U.S. company producing the high-bandwidth memory that runs alongside Nvidia’s processors in AI servers, and CEO Mehrotra said supply stays tight past 2027. New fabs take years to build. Every major AI buyer just committed in writing. The bears need to explain what changes that picture and they do not have an answer yet.

Daily Micron Technology (MU) Technical Analysis

At 04:00 GMT, Micron Technology stock is trading $1214.27, up $165.76 or $15.81%. On Wednesday, the stock settled at $1048.51, down $3.26 or -0.31%.

The strong overnight rally took out the June 22 top at $1213.56, reaffirming the uptrend and setting the stock up for a gap higher opening when the cash market opens at 13:30 GMT.

The swing chart and moving averages are supporting the strong uptrend. Consecutive higher tops and higher bottoms since early May are the classic definition of an uptrend. The three downswings of $166.46, $225.28 and $222.46, followed by new highs are further proof that traders are implementing a “Buy the Dip” strategy.

Swing chart traders are now eyeing $991.10 for a potential change in trend and momentum. However, the 50-day moving average at $773.66 is in a close enough position to prevent any prolonged sell-offs and will likely attract fresh buyers if tested. But right now our focus is on whether traders take out offers in today’s session and chase the market higher, given the heightened volatility.

What to Watch

Thursday’s cash session at 13:30 GMT puts the overnight move on trial. A 15.81% gap after two sessions of heavy selling is the kind of open where longs from the spring take profits into the same prints where Tuesday’s sellers are chasing. The first 30 minutes will tell you which side has more weight behind it.

The gap above the June 22 high at $1,213.56 is the line Thursday’s session has to answer. If the cash market holds above it through the first hour, the two-day selloff becomes another higher low in a trend that has not broken since May.

Swing chart traders are watching $991.10 for any change in trend, but the 50-day at $773.66 is close enough underneath to keep dip buyers interested well before the structure breaks. The pattern all year has been three pullbacks of $166 to $225, each one followed by a new high.

Thursday’s open will tell you whether this is the fourth. If the gap fills instead, the overnight move was short covering into a better exit and the bears get another shot at the stock below the old high.

More Information in our Economic Calendar.