Micron Technology reported unprecedented results driven by artificial intelligence demand, while Nvidia faced turmoil over a supply chain scandal and SAP reached a 52-week low amid cloud migration challenges and regulatory scrutiny. The week of March 16-21 served as a pivotal moment for the artificial intelligence sector, highlighting a stark contrast between the fortunes of infrastructure providers and software giants.
On March 18, Micron announced one of its most remarkable quarters in the semiconductor industry, with its financials showcasing the impact of AI-driven demand. The company achieved a revenue of $23.86 billion, reflecting a staggering 196% increase year-over-year. Its gross margin soared to 74.4%, significantly up from the prior 36.8%. Net income skyrocketed to $13.8 billion, marking a remarkable 771% increase, while the operating margin reached 67.6%, exceeding even Nvidia’s industry-leading figures. CEO Sanjay Mehrotra projected third-quarter revenue of approximately $33.5 billion, with an anticipated 81% gross margin. He stated that the demand for DRAM and NAND chips is likely to persist beyond 2026, as AI transforms memory technology into a crucial supply chain element. Despite these record results, Micron’s stock retreated over 5% on Friday to close at €365.10, driven by profit-taking. Year-to-date, shares are still up nearly 36%, and more than 268% over the past year, although the price-to-earnings ratio remains below historical averages, leading to a consensus “Strong Buy” rating among 32 analysts.
In contrast, the week began favorably for Nvidia, capped by CEO Jensen Huang’s announcements at the annual GTC developer conference, where he projected expected orders for the Blackwell and Vera Rubin platforms would reach $1 trillion by 2027—doubling previous forecasts. This optimism was supported by eleven consecutive quarters of revenue growth exceeding 55%. However, the situation took a dramatic turn on Thursday when the co-founder of Super Micro Computer (SMCI) and two others were indicted for allegedly diverting servers containing $2.5 billion worth of Nvidia AI chips to China, circumventing export controls. Following the news, SMCI shares plummeted 28%, while Nvidia’s stock fell 4.8% in a single day, ending the week at €150.44, approximately 16% below its 52-week high. Although Nvidia is not named as a defendant in the indictment, the scandal raises critical questions about the industry’s vulnerability to geopolitical risks, an issue likely to persist in discussions around export controls.
SAP, meanwhile, encountered one of its most challenging weeks, with shares plummeting to a new 52-week low of exactly €152.80. The stock has lost nearly a quarter of its value since the beginning of the year and is down approximately 39% over the past twelve months. The downturn was triggered by a report stating that SAP’s cloud migration strategy is lagging significantly behind targets—by an estimated €2 billion, or 24%. The on-premise support revenue for fiscal 2025 came in at €10.5 billion, far exceeding the targeted €8.5 billion, indicating that existing customers are hesitant to invest in costly transitions to the S/4HANA cloud platform. Compounding these worries, SAP faces a formal EU antitrust investigation concerning aggressive customer service tactics. As a result, Barclays and BMO Capital have lowered their price targets for the company, though both maintained positive ratings. SAP’s upcoming first-quarter results, scheduled for April 23, will be critical in addressing these issues.
Oracle is also navigating a complex landscape, closing Friday at €129.46, more than 53% below its September 52-week high and the worst performer among the ten most valuable U.S. technology companies year-to-date, down 22%. The company recently issued a security update to address a critical vulnerability in its Identity Manager and Web Services Manager, which poses significant risks as it allows for unauthenticated remote code execution. Despite these challenges, Oracle’s cloud business grew by 41% in the last quarter, and AI infrastructure revenue surged 243%, with remaining performance obligations climbing to $553 billion. J.P. Morgan recently upgraded Oracle’s stock from Neutral to Overweight with a price target of $210, highlighting an improved risk-reward profile following the share price decline.
While IBM achieved a breakthrough in quantum computing on March 21 by networking two quantum processors to create a 142-qubit system, the announcement failed to bolster investor interest. BMO Capital cut its price target to €290, while J.P. Morgan reduced its target to €283. IBM shares closed the week at €209.60, about 22% below their 52-week high. The company’s growth narrative is increasingly tied to its AI initiatives, with the watsonx platform generating more than $12 billion in generative AI bookings.
This week revealed a significant divide within the AI sector. Companies like Micron and Nvidia are reaping the rewards of AI’s growth through substantial profit margins and expanding order pipelines, while others like SAP and Oracle are grappling with operational delays and regulatory challenges. The SMCI indictment illustrates the AI industry’s exposure to geopolitical tensions, highlighting the critical nature of supply chain integrity in a rapidly evolving landscape. As the AI market grows, so too does the complexity of its risks.
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