Tech Split: Micron Rallies, Nvidia Slides on Valuation Worries

Micron Technology beat earnings expectations this week, sending its shares higher and confirming that AI-related memory demand is accelerating. The chipmaker's data-center revenue surged on infrastructure builds, the company said. Nvidia and Apple slid, dragged lower by a market turning away from high-multiple growth names.

The rotation pulled the Nasdaq Composite down 4% for the week, its fifth straight decline. The Technology Select Sector SPDR Fund (XLK) mirrored the index, underperforming the S&P 500. Volume on the Nasdaq ran above average through Wednesday and Thursday before steadying Friday, suggesting conviction behind the move, several traders said. The XLK's relative strength index dipped below 40, entering oversold territory for the first time since October.

Nasdaq caps fifth straight decline with 4% weekly loss on tech rotation

Micron's guidance for the current quarter topped consensus, driven by memory orders from hyperscaler clients. That kept the semiconductor trade alive even as large-cap AI names weakened. Qualcomm shares edged down on the week. The market weighed its handset business against edge-AI growth, a dynamic reflected in its mixed positioning, according to options flow.

Apple fell after reports of weaker iPhone demand in China. The company has yet to show a clear AI-driven replacement cycle, analysts said. OpenAI's product rollout this week gained less market attention, overshadowed by the sector-wide shift out of high-valuation stocks.

ON Semiconductor was also in focus after announcing its $7 billion acquisition of Synaptics. The deal raised concerns about shareholder dilution and margin targets, pushing shares lower. The transaction underscored an accelerating M&A theme among chip makers seeking scale in high-growth end markets.

onsemi's $7B Synaptics deal: shareholder dilution risk

AlphaScala's proprietary data shows Nvidia now carries a Moderate Alpha Score of 63, suggesting the pullback has created a more balanced risk-reward entry for a watchlist. Qualcomm scores Mixed at 45, reflecting uncertainty between its handset exposure and AI prospects.

The coming week brings the final read on first-quarter GDP and the Federal Reserve's preferred inflation gauge. Both data points will test whether the rotation out of large-cap tech is a hedge-driven shift or a deeper repositioning toward value. Options activity on the XLK showed modest put buying, indicating some downside protection without outright bearish bets.

The next earnings cycle for the tech sector begins in July. Until then, sector direction hinges on macro prints and any surprise announcements around AI capital spending.