'We don't view this as a bubble' that will pop soon: Wall Street weighs surging

Just as investors grew jittery over lofty valuations, Micron (MU) delivered the blockbuster outlook needed to keep the AI rally alive.

But while chipmakers celebrate soaring hardware prices, the rest of the tech sector is left holding a very expensive bill.

The memory chipmaker's blowout earnings and guidance last week reassured investors that AI spending remains on track. It sent AI bottleneck stocks higher, strengthening the case for further upside in the S&P 500 (^GSPC).

How did Micron's earnings reassure AI spending concerns?

What risks threaten the current AI stock rally?

Why are tech companies facing higher AI costs?

Which AI infrastructure stocks are strategists recommending now?

"Can the spending continue — is there enough capital to continue to fund all this? And Micron came out and basically said yes, yes, there is," Sevens Report Research founder Tom Essaye told Yahoo Finance on Thursday.

Essaye noted that despite Micron's massive earnings growth, the stock still trades at around 10 times forward earnings, roughly half the multiple of the broader S&P 500.

That valuation gap has reflected investor concerns that the AI boom may not be sustainable.

"If investors b

Fuente original: Yahoo Finance (https://finance.yahoo.com/markets/article/we-dont-view-this-as-a-bubble-that-will-pop-soon-wall-street-weighs-surging-ai-costs-on-stock-market-rally-115642288.html)