European Chip Stocks Rally After Micron’s Blowout Quarter

TLDR

• European stocks opened higher Thursday for the first time this week
• Brent crude fell over 1.5%, dropping below $73 per barrel, easing inflation fears
• Micron Technology reported quarterly revenue of $41.46 billion, far above forecasts
• European chip stocks surged, led by ASM International up 5.9%
• Micron guided next-quarter revenue at ~$50 billion, well above analyst estimates

European equity markets opened in the green on Thursday, lifted by two separate tailwinds: falling oil prices and a blockbuster earnings report from US chipmaker Micron Technology.

Brent crude futures fell more than 1.5% to below $73 per barrel. The drop came as US-Iran peace talks progressed, unwinding the geopolitical risk premium that had pushed oil higher in recent weeks.

Lower oil prices eased inflation concerns across the eurozone. That reduced pressure on the European Central Bank to raise rates further after its 25-basis-point hike earlier this month.

Rate-sensitive sectors like technology and real estate responded positively. These sectors had been under pressure from expectations of tighter monetary policy.

The pan-European STOXX 600 gained 0.2%. Germany’s DAX rose 0.3% and Italy’s FTSE MIB added 0.3%. France’s CAC 40 was flat. London’s FTSE 100 bucked the trend, falling 0.3%, dragged lower by energy giants BP and Shell.

Micron Earnings Spark European Chip Rally

Micron reported fiscal third-quarter revenue of $41.46 billion. That was more than four times the $9.3 billion posted a year earlier and well ahead of the $35.84 billion analysts had expected.

Adjusted earnings per share came in at $25.11, beating the $20.78 estimate. Micron’s stock surged more than 18% in after-hours trading.

The company’s data centre business was the standout. Revenue there climbed more than sevenfold to $11.5 billion, driven by demand for memory chips used in AI infrastructure. Gross margin rose to 84.9% from 39% a year earlier.

Micron also guided for current-quarter revenue of around $50 billion. That is nearly four and a half times the year-earlier figure and well above the $43.58 billion consensus estimate.

The company said it signed 16 long-term supply agreements with data centre operators and automakers, with expected commitments of $22 billion over three to five years.

European Semiconductor Stocks Lead Gains

ASM International led the sector with a gain of 5.9%. ASML rose 4.2%, BE Semiconductor Industries gained 3.8%, Infineon added 5.6%, and STMicroelectronics climbed 4.3%.

ASML Holding N.V., ASML

The broader STOXX Europe Technology index rose 1.8%, making it one of the top performers on the STOXX 600.

Goldman Sachs analyst Alexander Duval said supply tightness in both DRAM and NAND memory, driven by AI demand, creates a positive near-term outlook for European semiconductor equipment makers.

Despite the positive session, European indices continue to lag the record-breaking rallies seen on Wall Street and in Asia. The region’s heavy weighting in energy and traditional industries limits its exposure to the AI-driven gains powering other markets.

The fall in oil prices also weighed on energy stocks, capping broader index gains even as tech pushed higher.

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