Source: Zhitong Finance "Since 1950, the S&P 500 index has risen more than 10% 21 times as of the end of May. In about 90% of these cases, the S&P 500 index rose for the rest of the year. There were only two instances of declines for the rest of the year, in 1987 (-13%) and 1986 (-0.1%)." With the rebound of the stock market, the old adage "Sell in May and Go Away" seems to have been a bad advice once again. Last month, the S&P 500 index rose 4.8%, the best May performance since 2009. The NASDAQ 100 index rose nearly 6.2%, and the NASDAQ Composite Index rose 6.9%. Goldman Sachs FICC & Equities Trading Division said: "History doesn't really support this saying. Don't sell, leave the market (go on vacation), and enjoy the good times." The rising trend is still to be continued? If history is any guide, it may indicate that the rise of the stock market is not over yet. Looking ahead to the rest of 2024, Scott Rubner, Managing Director of the Goldman Sachs Global Markets Division and tactical expert, pointed out the following historical background for investors. Rubner stated that the S&P 500 index has risen 10.7% year-to-date, and since 1950, the S&P 500 index has risen more than 10% 21 times as of the end of May. In about 90% of these cases, the S&P 500 index rose for the rest of the year. There were only two instances of declines for the rest of the year, in 1987 (-13%) and 1986 (-0.1%). "Since 1950, the median return of the last 7 months of each year (June 1 to December 31) is 5.4%. In the aforementioned 21 cases, the average performance of the last 7 months increased to 8.1%." Rubner added. Rubner also pointed out that the NASDAQ index has risen for 16 consecutive Julys, with an average return of about 4.64%.
Author: Wei Haoming.

Thanks to its HBM business, Micron became one of the biggest beneficiaries of the AI spending boom. Micron said in its earnings call that the HBM opportunity was worth "billions of dollars," exceeding the expectations of some on Wall Street. The results released after the close on Wednesday showed that third-quarter revenue soared 82% beyond expectations, but earnings expectations failed to shock the market. Nevertheless, several investment banks on Wall Street remain optimistic about the prospect of Micron's HBM business, and use this to be bullish about Micron's future growth.

Performance review: As of May 30, Micron's adjusted EPS was $0.62, with revenue increasing YoY by 82% to $6.81 billion. The operating cash flow for the period was $2.48 billion, lower than the expected $3.24 billion, while the gross margin was 28.1%. Analysts expected an EPS of $0.53 and revenue of $6.67 billion. Looking ahead to the next quarter, Micron expects adjusted EPS to be between $1.00 and $1.16, with revenue expected to be around $7.6 billion +/- $200 million. The adjusted gross margin is expected to be between 33.5% and 35.5%, with the market's expectation at 34.5%.

Barclays analyst Tom O'Malley gave Micron a "shareholding" rating with a target price of $145. Wells Fargo & Co also reiterated its "shareholding" rating on Micron with a target price of $190, citing their continued belief in "a favorable upward cycle" driven in part by the growth of HBM3e, which should provide "upward momentum for several quarters."

Other analysts are also impressed with Micron's advantages in artificial intelligence, including Bank of America analyst Vivek Arya, who mentioned Micron's exposure to Nvidia using HBM3e technology.

In an investor report, Arya reiterated his "buy" rating on Micron and a target price of $170, stating, "Management emphasizes that production has already sold out in FY24 and FY25, with prices remaining stable, providing visibility for healthy sales and profit margin growth."

Arya said that in addition to HBM, Micron has opportunities in other areas, including high-capacity DDR5 and data center SSDs, "because demand for AI/traditional servers is increasing, and the innovative AI (personal computers/tablets/smartphones: annual sales of 1.5-2 billion units) has added another growth dimension of 4-8GB incremental DRAM capacity (+50%-100%)."

In addition to the bullish news related to Nvidia, Arya also highlighted other bright spots in Micron's performance, including increased capital spending on wafer fab equipment by Applied Materials, Camtek and others.

Editor/Jeffy