Micron’s quarterly report revenue surpassed $54 billion, and the next-quarter revenue guidance was raised directly to $61.5 billion, with the gross margin lifted to a high of 87%. HBM production capacity was locked in early through long-term contracts, and along with the planned construction of two new plants with budgets exceeding $250 billion, the supply-demand tension in the AI hardware industry chain has been laid bare.
The subtlety in the market is that after results far exceeded expectations, the stock price only edged up slightly in after-hours trading. Once optimistic sell-side expectations have already been fully priced in, the real standoff for semiconductors and the Nasdaq hinges on the tug-of-war between strong profitability in AI hardware and a long-term risk-free rate above 5%. As long as the cost of capital remains high, the valuation expansion room for risk assets is inevitably constrained.
This scenario of upstream capacity being locked down by long-term contracts is also working its way along cross-market supply chains into the crypto ecosystem. Compute servers and mining rigs compete for the same underlying manufacturing capacity, and hardware procurement and computing costs are materially driven up.
As tech giants’ capital expenditures continue to absorb more resources upward, liquidity segmentation will only intensify. What the market is waiting for is whether U.S. semiconductor bellwethers can break through the pressure from interest rates by leveraging earnings growth momentum, and then transmit that spillover energy to a wider range of risk assets.
The subtlety in the market is that after results far exceeded expectations, the stock price only edged up slightly in after-hours trading. Once optimistic sell-side expectations have already been fully priced in, the real standoff for semiconductors and the Nasdaq hinges on the tug-of-war between strong profitability in AI hardware and a long-term risk-free rate above 5%. As long as the cost of capital remains high, the valuation expansion room for risk assets is inevitably constrained.
This scenario of upstream capacity being locked down by long-term contracts is also working its way along cross-market supply chains into the crypto ecosystem. Compute servers and mining rigs compete for the same underlying manufacturing capacity, and hardware procurement and computing costs are materially driven up.
As tech giants’ capital expenditures continue to absorb more resources upward, liquidity segmentation will only intensify. What the market is waiting for is whether U.S. semiconductor bellwethers can break through the pressure from interest rates by leveraging earnings growth momentum, and then transmit that spillover energy to a wider range of risk assets.