Micron Technology tops US$1 trillion as AI memory demand surge accelerates

Market Performance

South African Market Summary

South African equities edged lower, with the JSE All Share index down 0.15% to 115,818.32 points and the Top 40 slipping 0.20% to 107,962.01 points as investors awaited the South African Reserve Bank’s policy decision. Economists polled by Reuters expect a 25 basis point rate hike at Thursday’s Monetary Policy Committee meeting, keeping monetary policy firmly in focus. Domestically, the composite leading business cycle indicator rose 2.4% in March, suggesting improved economic momentum. In policy developments, Communications Minister Solly Malatsi appointed an independent panel to review South Africa’s draft artificial intelligence policy after an earlier version was withdrawn over fictitious references. Meanwhile, Pepkor plans to launch its bank in April 2027, targeting 1.8 million primary customers within five years.

European Market Summary

European equities weakened on Tuesday as renewed geopolitical uncertainty weighed on risk appetite, with investors questioning prospects for a deal to end the conflict with Iran after US defensive strikes in the south of the country. The pan-European STOXX 600 fell 0.6% to 628.01 points, while most regional bourses declined. London’s FTSE 100 outperformed, rising 0.2% as it caught up after Monday’s UK market holiday. Ferrari fell 8.4% after unveiling its first fully electric vehicle, amid softer luxury EV demand. Investors also assessed ECB board member Isabel Schnabel’s call for a June rate increase, while UK retail sales remained weak despite improving from April’s record-low CBI reading. Portugal also advanced labour reform plans.

US Market Summary

US equities advanced on Tuesday, with the S&P 500 and Nasdaq closing at record highs as optimism around artificial intelligence outweighed concerns over Middle East peace talks and recent US strikes on Iran. Semiconductor stocks led the rally, with Micron surging 19% and briefly reaching a US$1 trillion market value after UBS sharply raised its price target. Strong earnings momentum and renewed confidence in the AI trade continued to support risk appetite, while investors also looked ahead to potential listings of major private AI-related companies, including SpaceX. Markets drew some comfort from comments by US Secretary of State Marco Rubio that a deal with Tehran could take a few days. First-quarter earnings growth is now expected at 29% year-on-year.

Asian Market Summary

Asia-Pacific markets advanced on Wednesday, with benchmark indices in Japan and South Korea reaching new highs as investors assessed the implications of recent US military action in Iran. In Australia, consumer inflation eased more than expected in April, helped by a government fuel tax cut, although core inflation edged higher as elevated oil prices filtered into the broader economy. Monthly CPI rose 0.4%, while annual inflation slowed to 4.2% from 4.6%. In China, industrial profits grew at their fastest pace since November 2023, rising 24.7% year-on-year in April from 15.8% in March. Profits increased 18.2% over the January-to-April period, although the recovery remains uneven as weak domestic demand and higher input costs continue to pressure firms.

Currency Market Summary

The rand weakened on Tuesday as renewed US military strikes on Iran reduced hopes of a near-term peace deal and pressured risk-sensitive emerging-market currencies. The dollar edged higher against major peers, including the euro and yen, as investors sought the relative safety of the greenback amid fresh uncertainty around the conflict. Iran accused the US of violating a ceasefire after Washington conducted what it described as defensive strikes in southern Iran, while US Secretary of State Marco Rubio indicated that negotiations to halt the conflict could still take several days. The shift in sentiment also weighed on the yen, pushing it closer to the 160-per-dollar level, which traders view as a potential threshold for Japanese intervention.

Commodity Market Summary

Gold was little changed on Wednesday as investors monitored signs of progress in US-Iran peace negotiations and awaited comments from Federal Reserve officials for guidance on the interest-rate outlook. Oil prices remained the key focus, with Brent crude moving back above US$100 a barrel after fresh US strikes on Iranian missile launch sites and mine-laying vessels reduced hopes of a near-term Middle East breakthrough. The conflict and continued disruption to shipping through the Strait of Hormuz have kept global energy markets under severe pressure, after oil briefly topped US$126 late last month. With Asia receiving about 80% of its oil through the chokepoint, the closure has forced importers to seek alternative supply, including US Strategic Petroleum Reserve crude heading to the Philippines.

Domestic Company News

Hosken Consolidated Investments (HCI) +5.57%

Hosken Consolidated Investments reported a stronger headline performance for the year ended 31 March 2026, despite a sharp decline in basic earnings. Revenue increased 6% to R14.23 billion, while EBITDA rose 4% to R5.43 billion. Headline earnings per share advanced 50% to 2 247.9 cents, supported by improved contributions from hotels, properties, coal mining, branded products and manufacturing, and a reduced loss in oil and gas prospecting. Gaming headline earnings increased 6%, although net gaming win slipped 1%. Earnings per share fell 61% to 3 212.5 cents, reflecting the high base from the prior year. Net asset value per share rose 11% to 33 597 cents. HCI declared a final dividend of 140 cents per share, up 18% year-on-year.

Datatec (DTC) -7.95%

Datatec reported a stronger audited performance for the year ended 28 February 2026, supported by improved profitability across the international ICT group. Gross invoiced income increased 9.3% to US$8.46 billion, while revenue rose 3.3% to US$3.67 billion. Gross profit advanced 9.6% to US$997.8 million, reflecting better operating leverage and margin performance. EBITDA increased 21.6% to US$269.1 million, with adjusted EBITDA up 17.8% to US$290.1 million. Profit attributable to shareholders rose 55.1% to US$91.8 million, while basic and headline earnings per share increased 54.1% and 56.5%, respectively. Underlying earnings per share rose 35.0% to 48.2 US cents. Net asset value increased 3.7% to US$540.3 million, and the dividend was raised 12.5% to 225 cents per share, highlighting a solid annual result.

Coronation Fund Managers (CML) -4.36%

Coronation Fund Managers reported a modest improvement in revenue and operating earnings for the interim period ended 31 March 2026, although headline earnings declined. Revenue increased 3% to R2.09 billion, compared with R2.04 billion in the prior corresponding period. Earnings per share rose 6% to 218.0 cents, while fund management earnings per share, the company’s preferred measure of operating performance, increased 2% to 203.7 cents. However, headline earnings per share fell 5% to 195.1 cents, reflecting the impact of items outside core fund management earnings. The board declared an interim gross dividend of 203.0 cents per share, up from 200.0 cents a year earlier, reinforcing Coronation’s continued cash-generative profile despite a mixed earnings performance.

Pepkor Holdings (PPH) -1.67%

Pepkor delivered a strong interim performance for the six months ended 31 March 2026, with revenue from continuing operations rising 13.2% to R54.8 billion. EBITDA increased 11.6% to R9.1 billion, while operating profit advanced 9.4% to R6.3 billion, or 10.0% on a normalised basis. Headline earnings per share rose 10.3% to 93.1 cents, with normalised HEPS up 12.1% off a high base. Gross profit margin improved by 170 basis points to 40.8%, supported by retail execution and market share gains. Cash generated from operations increased 15.1% to R4.1 billion. Strategic momentum continued across retail, financial services and informal markets, including strong online sales growth, store expansion, higher Flash throughput and approval to establish a bank.

Global Company News

AutoZone Inc. (AZO) -8.99%

AutoZone reported stronger third-quarter results, supported by resilient demand for replacement parts and continued growth in its higher-margin commercial business. Sales for the quarter ended 9 May increased 8.4% year-on-year to approximately US$4.84 billion, slightly ahead of analyst expectations of US$4.83 billion. Net income rose 5.4% to US$641.5 million, while earnings of US$38.95 per share comfortably exceeded the US$36.28 expected by analysts. Domestic commercial sales increased 10.4% to US$1.4 billion, reflecting demand from an ageing US vehicle fleet as elevated new-car prices encourage consumers to keep vehicles for longer. However, gross margin declined to 52.2%, mainly due to a non-cash inventory accounting charge, partly offset by underlying margin improvements. Higher costs and inventory investment remain key pressure points for investors.

Micron Technology Inc. (MU) +19.29%

Micron Technology briefly surpassed US$1 trillion in market value for the first time, extending a powerful rally driven by investor enthusiasm around artificial intelligence infrastructure and advanced memory demand. Shares jumped after UBS raised its price target sharply to US$1,625, the highest among covering brokers. The move highlights Micron’s growing strategic importance as AI spending broadens beyond graphics processors into high-bandwidth memory and storage, where supply remains tight and pricing power has improved. Micron has said its entire 2026 HBM supply is already sold out, with next-generation HBM4 products now in production. The shares have risen more than eightfold over 12 months, supported by stronger earnings, institutional buying and a sharp recovery from the post-pandemic memory-chip glut.

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