The AI trade may be glitching for some tech names, but Micron just hit “upgrade.”

Micron blew past fiscal Q1 expectations, topping revenue and earnings estimates. The data storage manufacturer also issued guidance far higher than anticipated: its net-income guidance came in 75% above consensus. Shares jumped 10.16% today.

The impressive quarter was driven by demand-supply imbalance. AI-related demand for memory is so strong that Micron expects to meet only half to two-thirds of some customer orders, pushing gross margins to 68%. Suppliers that were punished by the last downturn in the dynamic random-access memory market a few years ago are deliberately keeping output tight, pushing prices high. With supply expected to stay constrained, Cantor Fitzgerald’s CJ Muse doesn’t see balance returning until 2027.

Micron is also lifting capital spending to $20 billion, up from $18 billion, though still below Muse’s estimate of $22 billion to $23 billion.

Cut to Oracle

AI stocks aren’t all sharing Micron’s momentum. The group has been dragged down by Oracle’s worsening debt picture and investor fatigue around expensive AI buildouts.

Just yesterday, Blue Owl Capital walked away from a planned $10 billion, 1-gigawatt data center project for OpenAI in Michigan, citing concerns about Oracle’s rising leverage and aggressive AI spending.

The problem is that Oracle is pouring money into infrastructure before the product, echoing the 19th-century railroad boom where tracks were laid before trains ran on them. Oracle signed $248 billion in new lease commitments that begin in fiscal Q3 and run up to 19 years, a 148% jump since August.

But even that number understates the true weight of the company’s liabilities. Oracle is also relying on leases, special purpose vehicles, and vendor financing to support its AI infrastructure push. “While those other forms of financing help reduce immediate cash needs and free cash flow burn, liabilities will climb much faster than the capex numbers imply,” analysts told Bloomberg.

Oracle fell 5% yesterday, and is now down roughly 50% from its September peak as investor sentiment sours.

On the brighter side…

Oracle’s weakness has spilled into the rest of the AI trade—but despite investor jitters, Micron is emerging as one of the sector’s strongest names, and analysts are leaning in.

JPMorgan lifted its price target and Bank of America upgraded the stock to Buy after results arrived this morning. Morgan Stanley even called Micron’s quarter one of the strongest revenue and profit beats in the “history of the US semis industry,” second only to Nvidia.

​​If Micron's momentum holds, its strength could help stabilize a tech rally that’s been rattled by Oracle’s debt-driven selloff, giving AI-exposed stocks a potential path to recover lost ground.—SY

🟢 What’s up

• Lululemon jumped 3.48% after activist investor Elliott Management disclosed a $1 billion stake, and is reportedly eyeing a new CEO to revive the brand.
• SoFi rose 4.04% after launching SoFiUSD, its new stablecoin for commercial clients.
• Rocket Lab climbed 11.05% after successfully launching the STP-S30 mission for the US Space Force.
• Rivian Automotive added 15.03% following an upgrade from Baird, which highlighted momentum around the upcoming R2 platform launching in 2026.
• Chipotle gained 1.7% on news it’s rolling out a High Protein Menu with grab-and-go chicken and steak cups.

What’s down

• In a buy-the-rumor, sell-the-news moment, pot stocks tumbled after Trump signed an order to reclassify marijuana, loosening long-standing restrictions. Tilray Brands lost 4.19%, Canopy Growth fell 11.98%, and Aurora Cannabis sank 3.41%.
• Instacart fell 1.53% after reports that the FTC has opened an investigation into its pricing practices, with identical supermarket items allegedly varying by around 7% on the platform.
• Insmed slid 16.08% after discontinuing development of brensocatib for chronic rhinosinusitis following a mid-stage trial failure.
• Accenture dropped 1.38% despite beating earnings estimates, as investors worried that AI is cannibalizing the IT and consulting sectors.
• Birkenstock sank 11.34% after issuing FY26 revenue and profit projections that missed estimates amid tariff-related demand uncertainty.
• FactSet Research Systems declined 7.68% after posting solid quarterly results but issuing guidance that fell short of expectations.

The US economy needs AI if it wants to survive. AI needs massive amounts of energy if it wants to survive. That’s created an investment opportunity for power providers—an opportunity that President Trump doesn’t want to miss.

Trump Media & Technology Group, the company behind the Truth Social platform, announced today that it will merge with TAE Technologies, a nuclear fusion developer, in an all-stock deal valued at over $6 billion. Trump Media will invest $200 million in TAE, with another $100 million coming once the deal is registered with the SEC, and shareholders of each company will own 50% of the combined company. Shares of Trump Media soared 41.93% on the news.

TAE is already backed by companies like Google and Chevron, but this deal takes it to a whole new level: it will become the first publicly traded nuclear fusion company in the US. Its entry signals the beginning of the next era in the AI arms race, as tech companies slowly shift their focus from building out data centers to powering them, utilizing nuclear power in greater numbers. That theme has helped other nuclear power providers enjoy strong gains this year already: Oklo is up 266.11%, and Centrus Energy has returned 245.22%.

The Department of Energy has made it clear that nuclear fusion is a national priority as the US competes with China, and Apollo Global Management says the country will need to add three New York Cities worth of additional power to the US grid by 2030 in order to meet data center demand. TAE expects to begin building a 50-megawatt fusion power plant next year, but considering the country’s enormous appetite for energy, it won’t be the last—and that’s great news for DJT shareholders.—MR

It may have taken years of central banking policy, many speeches from our bespeckled Fed chair, and countless inflammatory Truth Social posts—but it looks like inflation has finally begun waving the white flag.

• The delayed consumer price index reading for November showed that prices jumped 2.7% annually. That figure was below forecasts of 3.1%, and a deceleration from the 3% annual rate in September.
• Core inflation, which excludes food and energy costs, came in at 2.6%, which was also cooler than expected and the lowest core inflation reading since early 2021.

Stocks jumped on the news, leading the Nasdaq and S&P 500 to have their best CPI day since January.

“Today’s CPI shows disinflation not just holding, but gathering rhythm—a reminder that prices can still move in the right direction, even when the details get noisy,” explained Gargi Pal Chaudhuri, Chief Investment and Portfolio Strategist at BlackRock.

What this means for the Fed

As we all learned in Econ 101, when the labor market and consumer sentiment are both flagging, a lower inflation reading ups the chance the Fed will cut rates to give the economy a shot in the arm. If inflation is consistently decelerating, it’s a sign restrictive monetary policy is no longer needed.

“Of course, it’s only one month’s data points and they will likely fluctuate in the upcoming months, but the main concern of Fed officials who are reluctant to keep cutting is that inflation is persistently high and won’t come down if they keep lowering interest rates, and at this point that doesn’t look like it’s the case,” explained Chief Investment Officer for Northlight Asset Management Chris Zaccarelli.

Not so fast…

However, despite the early Christmas gift, many analysts are warning investors not to get too excited. After all, there were huge gaps in data collection during the government shutdown, and the absence of an October CPI report makes it harder to track the trend. That’s why some analysts say it’s too soon to get a clear signal from the noise in terms of the Fed’s next move.

Investors seem to agree: The chances of a rate cut in January barely budged from where they stood yesterday, and right now the market still thinks there’s a good chance that cuts take a breather next month.

There’s another wrinkle, too. President Trump has been hounding the Fed to cut rates for months now, to the point that the White House has taken to painting a rosier picture of inflation than what the numbers reveal. While today’s reading did show cooling prices, be wary of a top-down narrative that paints an unrealistically bright picture as the administration pursues its economic agenda.

But still, delayed good news is better than none at all.—LB

• Here’s what investors are most concerned about as they head into 2026.
• The venture capital arms of Alphabet and Nvidia just invested in a Swedish vibecoding startup called Lovable, giving it a $6.6 billion valuation.
• Two peer-to-peer boat rental platforms—Boatsetter and GetMyBoat—are merging into one giant ‘AirBnB for boats’.
• The checks aren’t just for babies: President Trump announced active-duty servicemembers will get a $1,776 “warrior dividend.”
• Bill Ackman’s hedge fund, Pershing Square, is backing Howard Hughes Holdings with $2.1 billion as the latter buys insurer Vantage Group.
• Barnes & Nobles may be going public once again if Elliott Investment Management has anything to say about it.

A big week of economic data ends quietly tomorrow with a pair of reports: existing home sales from the National Association of Realtors, and a final reading of consumer sentiment for December from the fine folks over at the University of Michigan.

As for earnings, we’ll hear from Carnival Corp., Paychex, Conagra Brands, and Lamb Weston.