Micron reported Q3 revenue of $41.5B (74% QoQ, 346% YoY growth) with record margins (84.9%). Company announced 16 supply chain agreements (SCAs) worth $100B+ in cumulative value through contract term, securing $22B in cash commitments and financial guarantees.
On June 24 Eastern Time, storage giant Micron Technology released its fiscal 2026 third-quarter earnings report. The data shows that in the third quarter of fiscal 2026, the company achieved revenue of $41.5 billion, up 74% sequentially and 346% year-over-year, marking the fifth consecutive quarter of record-breaking performance. In the same period, the company's consolidated gross margin reached 84.9%, up 10 percentage points sequentially, while operating cash flow reached $25.4 billion and free cash flow reached $18.3 billion, both reaching quarterly highs.
Alongside earnings that far exceeded market expectations, Micron also disclosed details of 16 long-term supply agreements in the earnings report and subsequent earnings call, stating that even at the lower end of pricing, the cumulative value of existing signed orders over the remaining contract duration would exceed $100 billion, while the related agreements would secure $22 billion in cash deposits and financial commitments for the company.
Benefiting from the convergence of beat earnings and the positive momentum of the $100 billion long-term agreements, Micron's after-hours stock price surged, approaching 16% at one point before stabilizing in the 14–16% range by press time. Catalyzed by Micron's earnings beat, A-share computing power and semiconductor sectors of the AI chain rallied across the board that day; the Korean market also strengthened in tandem, with the two storage chip giants Samsung Electronics and SK Hynix posting single-day gains of 5% and 13% respectively.
Notably, while the global AI chain bull market has been surging, gold—which has consistently delivered strong returns to investors in recent years—has started weakening this year. COMEX gold futures briefly reached a high of $5,600 per ounce in late January, then entered a consolidation and adjustment phase, and after sustained declines over the recent period, gold prices have fallen below the $4,000 per ounce level by press time.
On the surface, the AI chain market and gold prices have moved in completely opposite directions recently. So is the AI chain bull market a major factor suppressing gold prices? And how will the AI chain narrative unfold going forward?
From the perspective of trading style in the A-share market, capital is gradually migrating from large-cap value to mid-cap and small-cap growth. Trading data shows that the Science and Technology Innovation Board (STAR) and the ChiNext Board have witnessed a bull market over the past two years, with tech and growth indices such as STAR-ChiNext 50, STAR 50, and Growth Tech clearly outperforming the broad market indices. Driven by the bull market, the combined trading volume of the two innovation boards has been rising as a proportion of total market turnover (excluding the Beijing Stock Exchange and on-venue ETFs).
In terms of themes, the bull market on the STAR and ChiNext boards is primarily driven by sustained strong momentum in sub-sectors of the AI chain such as computing power and semiconductors, though emerging themes like new energy and advanced manufacturing have also contributed. The market turnover structure clearly reflects that trading is currently concentrated in these hot themes, specifically the information technology sector with AI as the core narrative. Its share of total market turnover has been continuously rising, maintaining levels above 40% in recent months, and even approaching 50% during peak periods.
Meanwhile, the highly crowded trading has pushed sector divergence to extremes. As of June 24, among the Shenwan 31 primary industry indices, only 11 have recorded positive returns since the beginning of the year. Among the majority of sectors with negative returns over the same period, segments such as commercial retail, agriculture/forestry/animal husbandry, beauty care, and food and beverage have continued to decline and adjust, now approaching or breaking through the levels seen when the Shanghai Composite Index was at 2,600 in February 2024.
This sector divergence is also reflected in valuations: on one hand, AI-related industry indices such as STAR 50, semiconductors, and communications equipment have seen their valuation percentiles (PE-TTM) rapidly climb to above 80% of historical levels within just a few months; on the other hand, indices of underperforming sectors are mostly valued below the 40th percentile of historical levels, with the food and beverage sector—once hyped for baijiu stocks—even persistently trading below the 10th percentile.
The degree of valuation divergence between sectors appears less extreme than the market performance might suggest, primarily because sectors abandoned by the market—such as consumer and pharmaceuticals—see their denominator shrinking along with numerator compression, resulting in limited decline in valuation percentiles. In contrast, the surging AI-related sectors are experiencing passive valuation expansion as large volumes of capital flow in, guided by both sector high momentum and expectation realization. Some sectors' continuous new highs have pushed their valuation percentiles to even 100%.
The liquidity restructuring currently underway in the A-share market is a microcosm of the global capital markets today. In the U.S. equity market, the trend of capital migration is quite clear: recently, funds have been flowing out of energy, healthcare, food and beverage with tobacco, and software and services sectors, while surging into two sub-segments of the information technology sector—semiconductors and tech hardware. Reflected in the market, the Philadelphia Semiconductor Index has accumulated gains of 90% since the beginning of the year, with corresponding valuation percentiles climbing to 80%.
Another major characteristic of this capital migration is that flagship companies have become capital reservoirs. In the U.S. equity market, NVIDIA's total market cap briefly surpassed the $5 trillion mark, while the hot Micron Technology has also entered the trillion-dollar market cap club this year. In the Korean market, the bull market is highly tied to the two semiconductor giants Samsung Electronics and SK Hynix, whose combined weights account for more than half of Korea's total market cap. Domestically, core AI chain leaders such as Zhongjixu and Hon Hai Precision have also seen their total market caps break through the trillion-yuan threshold.
Notably, the AI chain bull market's capital siphoning effect is no longer limited to within equity markets, but has extended to cross-asset-class levels. According to World Gold Council data, in May this year, global technology ETFs recorded their highest monthly inflows since 2024; meanwhile, global gold ETFs experienced another major round of capital outflows.
For investors, the AI chain bull market consistently delivers excess returns with profiting effects far exceeding volatile and weakening gold, causing funds originally allocated to gold for portfolio hedging to continuously pivot toward tech growth sectors chasing higher returns. Global gold ETFs have experienced net outflows for consecutive months, further amplifying downward pressure on gold prices.
Therefore, while gold's sustained decline is primarily driven by macro factors such as rising interest rates and elevated inflation expectations, the continuous global capital inflows into the AI chain represent an equally important and undeniable drag on gold prices.
The uniform assignment of higher valuation premiums to the AI chain by global capital, particularly regarding computing power and semiconductor hardware which are in a structural bull market, is not merely speculative investment hype but rather a mid-to-long-term industry trend catalyzed by multi-dimensional and multi-layered logical resonance.
First, the fundamentals of the AI chain are overall robust and relevant industries are in a profitable cycle, which serves as the core support for this structural bull market. In the U.S. market, for example, AI-related companies in the Nasdaq and S&P 500 constituents showed profitability rates of 48% and 25% respectively in 2026 Q1, far exceeding the approximately 3% peak level during the 2000 internet bubble period. The consistent earnings beats by leading companies like NVIDIA and Micron have been key in dispelling investor concerns that AI-related companies merely burn cash without profitability.
In contrast, sectors impacted by the AI chain's strong capital siphoning effect—such as food and beverage, agriculture/forestry/animal husbandry, and commercial retail—commonly face challenges of slow demand recovery and intensifying competitive pressures, with relatively limited long-term growth prospects. Therefore, the high valuations the market assigns to the AI chain today represent not merely a bet on a new technological revolution, but also reflect investors' stronger willingness to allocate to high-momentum sectors given the fundamental comparative advantages.
Second, the profiting effects from surging stock prices are also core drivers of capital migration and liquidity restructuring. The AI chain's sustained surge and stable delivery of excess returns have sparked widespread investor concerns about missing out, prompting investors to reduce positions in traditional sectors while increasing holdings in core AI supply chain assets like computing power and semiconductors in order to avoid missing the tech narrative; new capital has also been continuously entering to position along the tech storyline, exemplified by recent overseas fund launches that are predominantly tied to SpaceX.
From the perspective of macro interest rates, elevated long-end U.S. Treasury yields have exerted broad pressure on various asset classes. The inverse performance of the AI chain and gold fundamentally reflects that, under the influence of profiting effects, excess return expectations have to a certain degree outweighed interest rate risks. The underlying logic is as follows:
Interest rate volatility drives changes in financing conditions. Rising rates represent clear headwinds for tech sectors that rely heavily on financing; moreover, since this year, AI chain-related companies have begun raising capital through debt issuance, further heightening tech enterprises' sensitivity to rate changes. While tightening expectations have been partially reflected in asset prices, investor sentiment remains relatively optimistic given sustained strong AI momentum. The prevailing market view is that the massive excess returns potential from an AI industry breakthrough far exceeds the marginal cost increases from rising rates.
The capital market's strong positive reaction following Micron's earnings represents, in essence, a public vote for the valuation reset logic of the storage industry's transition from "cyclical betting" to "long-term lock-in." Judging from AI chain companies' performance in Q1 this year, both profit growth rates and profit quality are moving upward in tandem. The strong signals released by Micron's latest earnings report provide key evidence for validating AI chain momentum during the Q2 window.
This once again demonstrates that earnings realization is one of the underlying drivers supporting the current AI chain structural bull market and represents a fundamental distinction from the 2000 internet bubble.
From an industry narrative perspective, driven by the AI super-cycle, core computing infrastructure segments represented by storage, optical modules, and PCBs have continuously redefined market perceptions over the past two years. Hard supply-side bottlenecks have significantly elevated industry earnings visibility. These sectors are collectively transcending traditional cyclical positioning and entering a new growth spiral of "expectation buildup—earnings verification—valuation reset," thereby extending the span of industry prosperity cycles.
Consequently, the market's core focus has shifted entirely from questions about whether demand is sufficient and sustainable to how long the storage supply bottleneck will persist. Moreover, this "supply-demand mismatch" in core segments is reshaping the entry barriers of the entire AI hardware supply chain. Leading enterprises, through a series of deep bundling mechanisms including long-term agreements, advance payment arrangements, and joint R&D initiatives, have secured higher growth certainty. This also signals that industry profits are rapidly concentrating among top-tier players with scale and technological moats—the fundamental reason why leading enterprises have become capital reservoirs in equity markets.
The tight supply-demand balance at the industry level provides solid support for sustained business cycles. Against the backdrop of increased global AI chain capital expenditure and continued capacity expansion, supply-side tightness is expected to persist beyond 2027. After 2028, as supply gradually improves marginally, the long-term robust demand for AI will also provide a floor for the entire industry. The prosperity cycle of the AI industry is thus prolonged, and the bull market in the AI chain under growth logic will consequently continue.
While the certainty of mid-to-long-term AI chain momentum remains strong, the current tech narrative has entered a high-volatility phase, primarily due to two key factors:
1. Tech stocks are typical high-beta assets that are highly sensitive to interest rate fluctuations and sentiment changes. Any shift in Federal Reserve policy expectations or temporary cooling of market sentiment could trigger sharp sector pullbacks;
2. Current market capital is highly concentrated in the AI chain. Should negative catalysts such as earnings disappointments or geopolitical risks emerge, the herd-like behavior of concentrated capital could easily trigger sharp selloffs, potentially causing severe market swings in the AI sector and the broader market.
Looking ahead to gold's future trajectory, against the backdrop of continued AI chain bull markets, the K-shaped divergence between tech and gold will become increasingly pronounced. On one hand, the current AI chain's strong capital siphoning effect continues to divert existing market liquidity. Combined with mounting consensus pessimism on gold, driven by profiting effects, funds allocated to gold are progressively withdrawing and pouring into high-momentum tech growth sectors.
On the other hand, as geopolitical tensions ease, market safe-haven demand continues to weaken. Combined with rising inflation expectations and rising rate expectations pushing up interest rates, gold's traditional hedging properties are temporarily losing effectiveness. Additionally, the marginal slowdown in central bank gold purchases further erodes fundamental support for gold prices. Therefore, under the convergence of these multiple negative factors, gold's subsequent performance is expected to be weak, with a high probability of a sustained bear market.
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