Just when it looked like the chips were down, Micron proved that Big Tech behemoths are still willing to spend huge swaths of money on hardware companies to create…at times questionable results.

But Micron isn’t in the AR glasses business—it builds memory chips, specifically high-bandwidth memory, a key component for servers powering AI. Its latest earnings report revealed that demand for its products has risen faster than expected, pushing shares up 14.73% on Tuesday, and boosting competitors like SK Hynix and Samsung along the way.

Here’s what the chipmaker reported in its fiscal fourth quarter:

• Earnings came in at $1.18 per share, higher than the $1.11 Wall Street expected.
• Revenue came in at $7.75 billion, a 93% year over year increase that far surpassed analyst expectations of $7.66 billion.
• The company forecast revenue to hit about $8.7 billion next quarter, a company record, and well above analyst estimates of $8.28 billion.
• Management said demand for its high-bandwidth memory chips will increase by $25 billion over 2025.

“With the advent of AI, we are in the most exciting period that I have seen for memory and storage in my career,” explained CEO Sanjay Mehrotra on the firm’s earnings call.

Should you invest?

Micron’s earnings reassured jittery investors, who have raised their standards for chipmakers as companies like Nvidia try to prove they still have room to run and aren’t coasting off hype. A few short months ago, investors sent Micron plummeting after its third-quarter outlook came through in line with, instead of beating, expectations.

While the broader semiconductor industry was down at the beginning of the summer, it rebounded after the Federal Reserve slashed interest rates last week—and Wall Street has high expectations for better things to come.

JPMorgan, Wedbush, and Raymond James all echoed their positive “overweight” ratings on Micron’s stock today after the earnings report dropped last night, and they weren't the only ones singing Micron's praises.

“Against very bearish investor sentiment (with some even thinking the cycle was already over), MU delivered results and guidance far better than any investor bogey we heard into the call. Most importantly, MU continues to establish technology leadership and management is maintaining a very constructive supply/demand outlook through next year,” UBS analyst Timothy Arcuri wrote in a note today.—LB

🟢 What’s up

• Southwest Airlines ascended 5.42% after the company laid out its growth plans in an attempt to fend off an activist investor attack.
• Starbucks climbed 1.93% thanks to an upgrade from Bernstein analysts who foresee a “grande comeback” for the coffee chain.
• CarMax revved 5% higher after posting strong second-quarter earnings, beating both top and bottom line forecasts.
• Jabil jumped 11.65% after the electronics parts manufacturer announced impressive earnings and revealed plans to cut costs.
• Bilibili, which sounds like you’re trying to get your friend William’s attention, popped 15.44% after Goldman Sachs analysts upgraded the Chinese internet company.

What’s down

• Super Micro Computer plunged 12.17% on the news that the Department of Justice is launching a probe into the tech company, a few weeks after note short seller Hindenburg Research published a report alleging “accounting manipulation.”
• Sonos, makers of your favorite subwoofer, sank 4.45% after a rare “double downgrade” by Morgan Stanley analysts, who demoted the stock from a positive “overweight” all the way to a negative “underweight.”
• Oil stocks took a big hit today after Saudi Arabia announced it will increase its oil production next month. Diamondback Energy fell 6.46%, Shell dropped 3.91%, and ConocoPhillips lost 3.23%.

David Tepper, one of the most successful hedge fund managers of all time and also one of the least successful NFL owners of all time, is all-in on China.

The Chinese government is pulling out all the stops to support its struggling economy. A wave of stimulus initiatives yesterday sent Chinese stocks soaring, and today’s follow up was even bigger: The Chinese government plans to inject banks with $142 billion in cash to stimulate lending in the country.

Tepper isn’t just all talk. In his fund Appaloosa Management, Tepper’s biggest position is Chinese e-commerce giant Alibaba, which accounts for over 12% of his portfolio. Other top positions include PDD Holdings and Baidu, and if Tepper is to be believed, he’ll be adding to those holdings soon enough.

Thousands of finance titans, policymakers, scientists, and other visitors are in NYC for Climate Week to convince businesses and national governments that prioritizing the green economy is more important than ever.

But while many of the most powerful figures in business and government circles gather to talk going green, just a few subway stops away Wall Street is less interested than ever.

Environment, social, and governance (ESG) investing strategies focus on screening stocks for a company’s climate, social, and governance policies and only investing in those that do some good in the world. ESG ratings include metrics like greenhouse emissions and board diversity, for example.

Back in 2021, ESG was everywhere. ESG ETFs and mutual funds packed a punch, drawing in billions from investors who wanted to make their portfolios more climate-conscious. 124 ESG-themed ETFs were launched in 2021 alone.

But over the past few years, investors have begun to drain ESG funds of their money. Asset management behemoths like BlackRock and State Street led the charge, shuttering lineups of ESG-related ETFs.

Over 27 ESG-related funds have been shut down in the first half of 2024, while only 2 were launched over the same time period—and that’s on top of the 36 that were shuttered in 2023.

Even worse: Investors pulled $8.8 billion from US ESG funds in only the first three months of 2024, according to Morningstar, making it the worst quarter for the category of funds ever.

ESG investing is going extinct

The retreat from ESG is partially due to backlash from conservatives who are critical of the idea that fund managers should be considering any other factor but a company’s shareholders in their investment decisions.

Accusations of “greenwashing” have also plagued many ESG funds, which is when an asset management firm charges higher fees for a specific thematic fund without actually delivering a unique investment strategy.

And the structure of ESG investing itself has also drawn criticism from those who argue that climate, social, and governance metrics shouldn’t all be combined into one rating system.

But for all its critics, the ESG slowdown has been US-based—in Europe, green investing is faring far better. For example, during the same quarter this year where ESG funds lost nearly $9 billion, European ESG funds gained $11 billion, according to Morningstar.

Seems like soon, investors will have to cross the pond to go green.—LB

• OpenAI, the maker of ChatGPT, is technically a nonprofit organization. But that’s about to change, with the startup restructuring to a for-profit business as it raises billions in funding.
• FinTok, or Financial TikTok, is a wild west of shoddy advice and shady investments. Here’s how to avoid being taken advantage of, like the 27% of Americans who’ve taken bad advice from the social media platform.
• AI is better at investing than humans, but when analysts use AI to assist their stock picking, the results get even more impressive.
• Dueling speeches from former President Trump and Vice President Harris revealed two different versions of where the economy is heading.
• Maybe we were wrong: Money market funds are seeing an influx of cash after the Fed cut rates, as yields remain historically elevated.
• 10 undervalued stocks with strong competitive advantages that are worth buying now.

The Personal Consumption Expenditures Price Index, better known by its cooler nickname, PCE, remains the Federal Reserve’s favorite measurement of inflation. But does inflation even matter anymore?

Over the last few weeks, the Fed’s focus has shifted from inflation to the other side of its dual mandate: employment. Fears of a labor market slowdown, and the economic downturn that follows, gripped investors in August, sending the stock market reeling. Those worries have largely abated, but recent data like the consumer confidence report earlier this week reveal that they’re still weighing heavily on Americans’ minds.

While the Fed’s spotlight has shifted, make no mistake: Inflation is still a priority. This week’s full slate of Fed speeches made it clear that central bankers will continue to keep a close eye on the increase in prices, particularly core PCE, which removes volatile food and energy costs.

Tomorrow’s PCE report is expected to show a 0.10% increase in August after rising 0.16% in July, but if that deceleration doesn’t come to fruition, be ready to hear a lot more about how it will affect the size of the Fed’s upcoming rate cuts.