The Paradox of the AI Boom... As Micron Soars, Apple and Microsoft Plummet Due to Cost Burdens

Newsis [Financial News] The New York stock market closed mixed as positive news regarding artificial intelligence (AI) semiconductors coincided with concerns over cost burdens for big tech companies. Micron Technology surged on earnings that exceeded market expectations, but concerns that rising memory prices could pressure the profitability of finished product and service companies such as Apple and Microsoft dragged down technology stocks across the board. 14%) from the previous close.
60. The sentiment was not bad at the start of trading. Semiconductor stocks supported the index as expectations spread that increased investment in AI data centers would boost demand for memory semiconductors.
Micron surged about 16% after releasing strong earnings and a positive outlook. However, the rally did not last long. 12% after announcing price hikes for MacBooks and iPads, citing rising component costs such as memory.
46% as news of product price increases coincided with the burden of AI infrastructure investment costs. Alphabet and Meta also dropped by about 1% and 2%, respectively. The market noted that increased AI investment does not act as a positive catalyst for all technology stocks in the same way.
This is because while increased demand and rising prices are factors for improved earnings for semiconductor companies, they can result in cost burdens for Big Tech companies that purchase components to sell products and services. Carol Schleif, Chief Investment Officer (CIO) of BMO Family Office, stated, "The market has realized that one company's explosive earnings and revenue come at the expense of someone else somewhere in the supply chain. " Matt Marley, Chief Market Strategist at Miller Tabak, pointed out, "Some cracks have recently appeared in the tech sector," adding, "If large AI data center operators continue to decline, it will be very difficult for the rest of the market to rise.
" As tech stocks faltered, funds shifted to value stocks such as healthcare, finance, and industrials. As a result, the Dow Jones Index hit an all-time high during intraday trading.
International oil prices rebounded for the first time in five trading days following the aftermath of the attack on a ship in the Strait of Hormuz. 92.
Until yesterday, international oil prices had fallen to levels just before the outbreak of war due to expectations of progress in U. S.
-Iran negotiations and a recovery in shipping volumes in the Strait of Hormuz, but they reversed course as concerns over maritime safety resurfaced. Inflation indicators also remained a burden.
1% year-on-year, marking the highest growth rate since April 2023. 4%, reaching its highest level since October 2023.
However, U. S.
Treasury yields did not move significantly as the figures were assessed as remaining within the market's expected range. The yield on 2-year U.
S. 39%.
The dollar also showed weakness. 2%.
Risk aversion sentiment extended to the cryptocurrency market as well. 3%.
56 per ounce.
Newsis [Financial News] The New York stock market closed mixed as positive news regarding artificial intelligence (AI) semiconductors coincided with concerns over cost burdens for big tech companies. Micron Technology surged on earnings that exceeded market expectations, but concerns that rising memory prices could pressure the profitability of finished product and service companies such as Apple and Microsoft dragged down technology stocks across the board. 14%) from the previous close.
km@fnnews.com Kim Kyung-min Reporter