AI stocks to fuel US Market rally again ?
US market has been on a wild ride so far in 2025.
After tumbling into correction in March and flirting with a bear market in April, the index recouped its losses in May & June and is up more than +3.5% YTD.
Similarly on Tue, 24 Jun 2025 the S&P 500 closed just 0.85% away from an all-time high (ATH) before closing flat the next day. (see below)
When trading ended on mid-week Wednesday:
-
DJIA: -0.25% (-106.59 TO 42,982.43).
-
S&P 500: -0.00% (-0.02 TO 6,092.16).
-
Nasdaq: +0.31% (-61.02 to 19,973.55).
There was one US economic report out mid-week, US New Home Sales. (see below)
For May 2025
New Home Sales.
In May 2025, US new home sales fell by the most in nearly 3 years.
This as (a) high mortgage rates and (b) rising economic uncertainty sapped demand, lifting supply of unsold houses on the market to the highest level since late 2007. (see below)
Rising new homes (supply)
Month-on-Month new home sales fell by -13.7% and Year-on-Year, it fell by -6.3%.
Numerically, new home sales came in at 623,000, much lower than analysts’ forecast of 694,000 and the downward revised April home sales of 722,000.
This decrease was the biggest since June 2022.
The Implication.
Falling new home sales, along with (1) weak homebuilding and (2) weak sales of previously owned homes (in April 2025), shows the housing market is struggling.
The housing sector is important because it makes up nearly 15% of US GDP.
Like weekly jobs claims and continuing jobs claims, new home sales is widely considered as a key indicator of US economic health.
Sharp drop in sales typically signals weakening consumer confidence and spending power, that usually foreshadow broader economic slowdowns.
With a falling sale, housing will likely reduce US’s economic growth (GDP) for Q2 2025, after coming in neutral in Q1 2025.
On that note, the “final” US GDP report (Q1 2025) is set to be released on Thu, 26 Jun 2025.
Recap: Q1 2025 GDP.
-
On 30 Apr 2025, the 1st preliminary reading of “-0.3%” was published.
-
On 29 May 2025, the 2nd preliminary reading of “-0.2%” was published.
Will the final estimate of Q1 2025 US real GDP show growth of 0% or higher?
According to Federal Reserve Bank of St. Louis analysis:
-
There are typically no obvious or systematic patterns in the size or direction of revisions between the preliminary and final GDP releases.
-
However, differences are usually minor, with most revisions falling within a range of ±0.5 percentage points.
-
There is “hope” that US’s Q1 2025 GDP could end up in positive territory ?
Micron Q3 2025 Earnings.
On a brighter note, $Micron Technology(MU)$ haned in a stellar Q3 2025 earnings report that exceeded both top and bottom lines; after market has closed for the day.
MU’s performance in comparison with the LSEG consensus:
-
Earnings per share (adjusted): came in at $1.91 vs $1.60 expected vs Q3 2024’s $0.62%, that’s up +308% Y/Y.
-
Revenue: was $9.3 billion vs $8.87 billion expected vs Q3 2024’s $6.81 billion; that’s up +37% Y/Y.
-
Net income: was $2.2 billion vs Q3 2024’s $702 million.
-
Gross margin: was a healthy 39%.
Q4 2025 Guidance.
MU has also reported an optimistic guidance for current quarter (Q4 2025).
-
Revenue is expected to be approx. $10.7 billion, up by +38% Y/Y from $7.75 billion a year earlier.
-
It is also ahead of the $9.9 billion average analyst estimate, according to LSEG.
-
Demand for its data centre (be it (i) cloud, (ii) enterprise or (iii) hyperscaler) contiinue to power MU’s revenue growth.
-
At the same time MU report growing demand for its the high bandwidth memory (HBM) chip thanks to AI boom.
Stock Movement.
On Wednesday, MU closed at $127.25 per share, down marginally by -0.52%.
However, it surged over +2.6% in after-hours trading to $130.67 and is expected to open higher on Thursday, post earnings.
MU’s earnings have confirmed that demand for chips-related stocks will remain strong as AI and new technology become more common. Keep your eyes on MU and $Broadcom(AVGO)$ !
Do check out my other posts. (See below). Help to Repost ok, Thanks.
Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks.
-
Thursday: TSLA cont'd to fall, UBER recover ? Thu, 26 June. Picked post.
-
QBTS & QUBT - Analyst's Must-Buy stocks ? Thu, 26 June. Picked post.
-
Red Chips BABA, BYD, TCEHY are "In" says GS. Sure ? Wed, 25 June. Picked post.
-
Do you think a weak Q1 2025 GDP report will dampen US market sentiments ’?
-
Do you think MU and other semiconductor stocks will spike today ?
If you find this post interesting, give it wings! ️ Repost and share the insights ?
Do consider “Follow me” and get firsthand read of my daily new post. Thank you.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Sleigh!