Why Micron's 19% surge pushed past Meta in market cap

Micron Technology jumped 19% on Tuesday, pushing its market capitalization past Meta Platforms for the first time. The rally came as investors bid up semiconductor stocks on fresh expectations that AI infrastructure spending will keep accelerating through 2025 and into 2026.

Micron makes the memory chips – DRAM and NAND – that go into servers powering large language models and AI training clusters. The company has been a direct beneficiary of the hyperscaler capex cycle. Microsoft, Amazon and Google are all expanding data center footprints. Tuesday's surge erased a year-to-date loss and brought Micron's market cap to roughly $140 billion, edging out Meta's $138 billion at the close.

The overtaking is symbolic more than structural. Meta itself is a major AI spender. CEO Mark Zuckerberg has pledged $60 billion to $65 billion in capital expenditure this year, much of it on compute infrastructure. The market is rewarding the supplier side more aggressively right now. Micron trades at about 4.5 times forward sales. Meta trades at 8 times forward earnings. The gap reflects different growth expectations: Micron's revenue is expected to grow 30% this fiscal year, while Meta's is seen rising 15%.

For the broader semiconductor sector, the readthrough is straightforward. AI demand is not just a story for Nvidia and the GPU makers. Memory, interconnects and packaging are all seeing capacity constraints. Micron's guidance last quarter already pointed to tight supply for high-bandwidth memory, a key component in AI accelerators. Tuesday's price action suggests the market believes that tightness will persist.

Among AlphaScala's covered stocks, the AI trade is increasingly concentrated in the hardware layer. Meta carries an Alpha Score of 55 out of 100, a Moderate rating. The stock fell 1.78% on the session. Infosys, with a score of 57, and HDFC Bank, scored at 43, were both little changed. Software and services names have not participated in the same way.

The question for traders is whether Micron's move is a catch-up rally or the start of a new leg. The stock had lagged Nvidia and Broadcom year to date before Tuesday. A sustained breakout above $130 would put next resistance at $145, a level not seen since early 2024. On the downside, $110 is the key support from the February lows.

Micron reports fiscal third-quarter earnings on June 26. Analysts expect revenue of $8.8 billion, up 30% from a year ago. The company's guidance for the current quarter will be the next concrete test of whether AI memory demand is still accelerating.