European Semiconductor Sector Surges Following Micron’s Record-Breaking Results

Key Highlights

• European markets posted gains Thursday, breaking a three-day losing streak
• Oil prices declined more than 1.5%, with Brent crude sliding under $73 per barrel
• Micron Technology delivered quarterly revenue of $41.46 billion, crushing expectations
• Semiconductor stocks across Europe rallied, with ASM International climbing 5.9%
• Micron forecasts next quarter revenue at approximately $50 billion, significantly above consensus

European stock markets traded higher on Thursday, propelled by two significant catalysts: declining energy prices and exceptional quarterly results from American semiconductor giant Micron Technology.

Brent crude futures declined more than 1.5%, settling below the $73 per barrel threshold. The retreat followed positive developments in US-Iran diplomatic negotiations, which helped eliminate the geopolitical premium that had elevated oil prices in preceding weeks.

The decline in oil prices alleviated inflation pressures throughout the eurozone. This development reduced expectations that the European Central Bank would implement additional rate increases following its 25-basis-point adjustment earlier this month.

Interest rate-sensitive industries including technology and property experienced upward momentum. These segments had faced headwinds from anticipated monetary tightening measures.

The continent-wide STOXX 600 index advanced 0.2%. Germany’s DAX climbed 0.3% while Italy’s FTSE MIB posted a 0.3% gain. France’s CAC 40 remained unchanged. London’s FTSE 100 moved against the trend with a 0.3% decline, weighed down by petroleum majors BP and Shell.

European Chip Sector Soars on Micron’s Blockbuster Report

Micron unveiled fiscal third-quarter revenue reaching $41.46 billion. This figure represented more than a fourfold increase from the $9.3 billion recorded in the same period last year and substantially exceeded the $35.84 billion analyst consensus.

Adjusted earnings per share reached $25.11, surpassing the $20.78 projection. Micron’s shares jumped over 18% during extended trading hours.

The company’s data centre division emerged as the clear winner. Revenue in this segment increased more than seven times to $11.5 billion, fueled by robust demand for memory chips utilized in artificial intelligence infrastructure. Gross margin expanded to 84.9% from 39% year-over-year.

Micron provided guidance for the current quarter’s revenue at approximately $50 billion. This projection represents nearly four and a half times the prior-year figure and significantly exceeds the $43.58 billion analyst consensus.

The company announced it has executed 16 long-term supply contracts with data centre clients and automotive manufacturers, representing anticipated commitments totaling $22 billion across a three-to-five-year timeframe.

European Chip Manufacturers Post Strong Gains

ASM International topped the sector performance with a 5.9% advance. ASML climbed 4.2%, BE Semiconductor Industries advanced 3.8%, Infineon jumped 5.6%, and STMicroelectronics rose 4.3%.

ASML Holding N.V., ASML

The broader STOXX Europe Technology index advanced 1.8%, positioning it among the strongest performers within the STOXX 600.

Goldman Sachs analyst Alexander Duval noted that supply constraints in both DRAM and NAND memory segments, fueled by artificial intelligence demand, establish a favorable near-term environment for European semiconductor equipment manufacturers.

Despite Thursday’s positive performance, European benchmarks remain behind the record-setting advances witnessed on Wall Street and across Asian markets. The region’s substantial allocation to energy and conventional industries restricts its participation in the AI-driven momentum energizing other global markets.

The drop in petroleum prices also pressured energy-related equities, limiting overall index appreciation even as technology shares advanced.

The post European Semiconductor Sector Surges Following Micron’s Record-Breaking Results appeared first on Blockonomi.