The stock market is having a split-personality kind of day, and one company is responsible for most of the drama.
As of 1:22 p.m. ET, the Nasdaq Composite (NASDAQINDEX: ^IXIC) index is up 1% and the S&P 500 (SNPINDEX: ^GSPC) has climbed 0.5%. The Dow Jones Industrial Average (DJINDICES: ^DJI), meanwhile, is down 0.3%. It actually opened in the green but slowly lost its grip throughout the morning.
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The divergence largely comes down to one company: Micron Technology (NASDAQ: MU).
Micron’s trillion-dollar moment
Micron is up more than 18% on a single analyst call. UBS’s Timothy Arcuri raised his price target on the memory-chip maker from $535 to $1,625. Arcuri essentially tripled his target and declared that AI has permanently changed how Micron deserves to be valued.
Chiefly, the analyst likes Micron’s newfound preference for multi-year supply deals. Micron is known as a highly cyclical stock, but the new pricing scheme could end the stock’s wild swings.
Arcuri did hedge his call. If high-bandwidth memory demand weakens, he warned, the stock could fall to $250. So there is that.
The rally pushed Micron’s market capitalization past $1 trillion for the first time, placing it among the ten largest U.S. companies.
Here is the wild part: Even with a trillion-dollar market cap, Micron only carries a 2% weight in the Nasdaq Composite and 1.5% in the S&P 500. That is a fraction of the 6%-plus weights held by most of the classic Magnificent 7 stocks. Yet, Micron contributed more to both indexes today than any of those giants. That’s pretty rare.
Over on the Dow, the ongoing Iran situation that lifted markets last week is now weighing on oil prices and, by extension, energy stocks. Crude dropped 2.3% on further progress in Strait of Hormuz negotiations. The sentiment was much brighter over the weekend, though. The Iran talks seemed to go well, until both sides launched angry words and new attacks.
Caterpillar (NYSE: CAT) rose 2.9% and provided a partial offset due to its heavy weighting in the price-weighted index, but with 22 of 30 Dow components in the red, there was only so much the construction-equipment giant could do. Most of the Dow members are within 1% of last Friday’s closing prices.
A trillion-dollar debut
The Nasdaq and S&P 500 are green because of Micron. The Dow is red because of oil. That is the session in two sentences.
