June 25, 2026, (Inside AI) — Global stocks surged Thursday after Micron Technology issued a blockbuster revenue forecast, reigniting the artificial intelligence trade and validating market enthusiasm for AI-linked equities. The memory chip maker's outlook, driven by soaring demand for high-bandwidth memory used in AI systems, sent its shares up sharply and lifted semiconductor indexes worldwide.
Michael Browne, chief investment officer at Franklin Templeton, told Reuters the earnings reinforce a structural shift. He cautioned investors against being underweight the AI theme, stating a pullback would be a buying opportunity.
'This is something unique,' Browne said, emphasizing the sector's growth trajectory.
Micron's Forecast Fuels Broader Rally
Micron projected fiscal fourth-quarter revenue well above analyst estimates, citing insatiable demand for its HBM3E chips, which are critical for training large language models. The company's data center revenue more than doubled from a year ago, confirming that AI infrastructure spending remains robust despite earlier fears of a slowdown.
The S&P 500 climbed 1.2%, while the Nasdaq Composite added 1.8%, led by chipmakers. Nvidia, AMD, and Broadcom all posted gains exceeding 3%. European and Asian semiconductor stocks also rallied, with ASML and TSMC rising sharply.
Browne's comments reflect a growing consensus among institutional investors that AI is not a speculative bubble but a multi-year capital expenditure cycle. He argued that even a 10% correction would be a chance to add exposure, given the earnings power of companies enabling AI.
Skepticism Lingers Despite Momentum
Not all market participants share the unbridled optimism. Some analysts warn that AI stock valuations have become detached from fundamentals, with the Philadelphia Semiconductor Index trading at a forward price-to-earnings ratio above 30, its highest in two decades.
David Kostin, chief U.S. equity strategist at Goldman Sachs, noted in a recent client note that while AI capex is accelerating, the timeline for monetization remains uncertain. He pointed to the lack of a clear return on investment for many enterprise AI deployments as a risk factor.
Others highlight concentration risk. The top five AI-related stocks now account for nearly 28% of the S&P 500's market capitalization, a level that historically precedes periods of underperformance for market leaders.
Despite these concerns, the immediate market reaction to Micron's results suggests that for now, the AI trade retains powerful momentum. Browne's call to avoid being underweight underscores the fear of missing out on what many see as a transformative technology wave.
The rally also reflects broader macroeconomic tailwinds, including easing inflation and expectations of rate cuts by the Federal Reserve later this year, which tend to benefit growth-oriented tech stocks.
Micron's forecast comes as the industry grapples with geopolitical tensions affecting chip supply chains. The company's ability to ramp HBM production while navigating export controls to China remains a key watchpoint for investors.
Looking ahead, the sustainability of AI-driven gains will likely depend on whether software companies can translate infrastructure spending into revenue growth. Earnings from Microsoft, Alphabet, and Amazon in the coming weeks will provide critical clues about enterprise AI adoption.
