Move over Nvidia, there’s a new chip champion in town. Memory-chip maker Micron Technology has taken its title as the primary beneficiary of the huge wave of spending on artificial-intelligence infrastructure. Now the question is whether it can keep it.

Micron’s earnings figures were just as mind-blowing as Nvidia’s most impressive quarters. Managing to quadruple revenue with gross margins of 85% is a rare feat. And Micron insists it’s not a one-off, with the memory-chip shortage set to last at least another 18 months. 

Where once commentators spoke of an “Nvidia tax,” it has been replaced for large tech companies such as Apple with a “Micron tax”—or at least a memory toll, as Micron’s South Korean rivals are reaping similar rewards. U.S. investors wanting to spread their bets on the memory boom will soon have the option of also investing in SK Hynix as it plans to list American depositary receipts next month.

But Nvidia also provides a cautionary tale for Micron shareholders. While still the leading AI chip supplier, Nvidia’s stock has been an underperformer this year. A flood of new AI processors is disrupting what had once been a quasi-monopoly and the competition shows no signs of slowing—just this week ChatGPT-developer OpenAI unveiled its custom AI chip designed with Broadcom, while Qualcomm announced supply deals with Microsoft and Meta Platforms.

Will Big Tech also seek to undermine Micron and its South Korean peers? Micron is taking pre-emptive action by locking in long-term supply deals with fixed price ranges, hoping to keep its big customers on side. But companies such as Microsoft and Google-parent Alphabet are under stock market pressure to show they can control their AI spending, which means at the very least they will be investigating ways to reduce the amount they are paying to Micron.

Micron has taken the AI stock crown. But as Nvidia has found, being on top makes you a target.

—Adam Clark

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Micron Technology revenue quadrupled in the second quarter, and the chip maker said the demand-driven chip shortage will last beyond 2027, a year after previous guidance that the shortage would end early next year. Micron has 16 long-term deals to supply chips.

• The stock surged more than 15% in after-hours trading after the company beat Wall Street’s expectations. Micron reported adjusted earnings of $25.11 a share and revenue of $41.5 billion, up 346% from a year ago. Adjusted gross margin was 85%, and adjusted operating margin was 81%.

• Sales growth in the recent quarter was led by the company’s two data-center segments which combined for 415% growth from last year to $25 billion. They now account for 61% of total sales. Micron and its peers have gone from a cyclical, commodity-like business to the hottest part of the artificial intelligence trade. 

• The data-center investment boom has driven prices for memory and storage chips into the stratosphere. Guidance was similarly strong. Fiscal fourth-quarter revenue is expected to be $49 billion to $51 billion with adjusted earnings of $31 a share at the midpoint, also well above expectations.

• Micron had $18 billion in free cash flow in the quarter, and at the end of May had $26 billion in cash, equivalents, and short term investments, up from $14 billion three months ago. 

What’s Next: Ultimately, this historic upcycle may face a painful end. But Micron is using its current market power to push customers into five-year supply agreements. The deals include cash deposits, pricing ranges, and minimum purchases.

—Adam Levine and Liz Moyer

It wasn’t just Micron that signaled the AI boom was alive and well on Wednesday. Chip maker Qualcomm treated investors to a flurry of important updates about its data-center business, including the reveal that Meta Platforms is among its customers.

• Qualcomm revealed at an investor day that Facebook parent Meta would use its Dragonfly C1000 central processing units when they become available in 2028. “We’re excited to continue partnering with Qualcomm Technologies as they design the next generation of CPUs for Meta,” Meta CEO Mark Zuckerberg said.

• Just hours later, the company raised its fiscal 2029 non-handset revenue target to $40 billion, almost double its previous guidance. The company also expects $15 billion of data-center sales by that point.

• IT giant Microsoft will use another of Qualcomm’s new products—the company’s High Bandwidth Compute chip architecture, which is expected in mid-2027.

• Qualcomm’s push into data centers comes as it seeks to diversify away from the smartphones, tablets, and gaming devices powered by its chips. Qualcomm expects handsets to make up just one-third of its revenue by fiscal 2029, down from 72% in fiscal 2025.

What’s Next: Chip stocks have struggled in recent days due to worries about how long so-called hyperscalers—including Meta and Microsoft—can maintain their aggressive data-center spending. But the slew of announcements, coupled with Micron’s strong results, could help revive faith in the AI trade.

—George Glover

The largest U.S. banks have enough capital to continue lending to households and businesses through even the most treacherous economic conditions, according to the Federal Reserve’s annual stress test. The results don’t immediately affect bank capital levels, though some are already announcing capital plans.

• The 32 banks subjected to a series of hypothetical adverse scenarios featuring, at worst, a 10% unemployment rate, double-digit real estate price declines, and plunging stocks can absorb $708 billion in loan losses and still function as lenders.

• The results should instill confidence in the financial system. Regulators introduced the annual stress tests after the 2008-09 financial crisis as a way to gauge banks’ health and expose potential risk areas. But the Trump administration wants to pull back on bank regulation and is rewiring the test process.

• The Fed is waiting until 2027 to calculate a key piece of how much capital banks must hold. Banks often announce new buyback and dividend plans after the results come out. This year, those plans will be based on 2025 stress capital buffers, or the capital lenders must hold above requirements.

JPMorgan announced plans to raise its quarterly dividend 10% and buy back another $50 billion of shares. Wells Fargo and Goldman Sachs said they were raising their dividends by 11% each, while Morgan Stanley is raising its dividend to $1.15 a share and buying back another $20 billion of shares. 

What’s Next: The Fed has opted to freeze those levels until it can incorporate input from banks into next year’s stress test models. Regulators appointed by President Donald Trump are working to overhaul the way they run stress tests after years of pressure by bank lobbyists.

—Rebecca Ungarino

President Donald Trump’s abrupt signing ceremony cancellation has tossed his housing affordability push into chaos just months before the midterm elections—and ruffled a lot of feathers on Capitol Hill. Trump is demanding lawmakers pass a stalled bill with strict voter eligibility limits before he’ll sign the housing bill.

• The bipartisan 21st Century Road to Housing Act he was supposed to sign Wednesday includes provisions that will encourage new-home construction and ease rules around financing manufactured homes, and other provisions. It also bans institutional investors from purchasing more existing family homes.

• House Speaker Mike Johnson indicated the delay may not last. He said he assured the president he would attach aspects of the voter eligibility bill to another potential bill to pass later this year. The president has 10 days to sign or veto the housing bill.

• Stephen Kim, an Evercore analyst who covers home builders, said they believe the housing bill will still become law. Even if the president vetoed the bill, “Congress has enough votes to override,” Kim wrote, citing Evercore strategist Matt Aks.

• It was supported by the National Association of Home Builders, whose Chairman Bill Owens said before the cancellation that it was expected to help increase the nation’s housing supply by reducing regulatory barriers and encouraging local governments to reform zoning and land-use policies, easing the affordability crisis.

What’s Next: The voter eligibility rules face a high hurdle. Senate Republicans have a 53-47 majority, but the bill requires 60 votes to advance because of the filibuster rule. No Democrats support the bill. Senate Majority Leader John Thune has rejected Trump’s calls to eliminate the filibuster rule.

—Joe Light and Liz Moyer

Reddit’s meme stock warriors appear to be at it again, taking to their WallStreetBets subreddit to urge people to buy shares in the struggling fast-food chain Wendy’s. That forced the stock up 35% and made it more actively traded than some red-hot tech shares like Micron Technology and Intel.

• Why was the burger chain known for its square patties and Frosty frozen desserts the target? In news, Wendy’s named former Potbelly Sandwich Works CFO Steve Cirulis as CFO and Chief Strategy Officer this week. CEO Robert Wright has a turnaround plan under way.

• WallStreetBets users in the past have used the forum to talk up so-called meme stocks like GameStop and AMC Entertainment. And Wendy’s has received love from retail investors before, enjoying a brief surge in the summer 2021. The stock has slumped 47% over the past year.

• Wendy’s looks well-positioned for a short squeeze, when a stock suddenly jumps, forcing short sellers to buy b