Chipwreck averted

Hey Superheroes,

It’s been a week of turbulent swings and sharp recoveries. On Monday, semiconductor stocks led a brutal two-day Nasdaq selloff — then Micron dropped its earnings, and everything changed.

Micron Technology reported Q3 FY2026 results on June 24, leading to an immediate positive market reaction, reversing sharp losses from June 23 when semiconductor fears sent the Nasdaq down 2.21%. The Dow hit a record high intraday. The AI trade, which had seen a downturn for two days, recovered strongly.

Back home, the macro picture is mixed. Australian headline inflation eased to 4.0% in May from 4.2%, but core trimmed-mean inflation actually accelerated to 3.6% — not the direction the RBA wants to see. The RBA held the cash rate at 4.35% on June 16, after three consecutive hikes. The Fed also held at 3.50–3.75% on June 17 under new Chair Kevin Warsh, though median projections still signal at least one hike before year-end.

Here’s what else moved this week.

Chipwreck Averted: Micron’s Record Quarter Boosts Confidence in AI Sector

The semiconductor sector spent most of this week in freefall. Then Micron reported, and the narrative flipped overnight.

1. The numbers

Micron Technology (NASDAQ: MU) posted Q3 FY2026 revenue of US$41.46 billion — a record — with non-GAAP EPS of US$25.11 per diluted share. That’s earnings growth of 1,215% year-over-year. Not a typo. The company then guided for approximately US$50 billion in revenue for Q4, blowing past analyst consensus of US$43.2 billion. The stock surged around 16% the following day.

2. The HBM story

The engine behind the numbers is high-bandwidth memory (HBM) — the specialised chips that sit inside AI accelerators and allow them to move data fast enough to run large language models. Demand from hyperscalers building out AI infrastructure has been insatiable, and Micron is one of only three companies in the world capable of supplying it at scale. The results indicate that AI infrastructure spending is likely to remain structurally resilient despite near-term jitters.

3. The market read-through

The earnings beat triggered a market-wide relief rally. The Dow Jones hit a fresh record high on June 25, while the Nasdaq and S&P 500 snapped two-day losing streaks. Micron has now overtaken Meta and Tesla in market capitalisation — a striking illustration of just how much the market values the memory infrastructure underpinning the AI buildout.

4. The bear case

Not everyone is celebrating. Sceptics note that Micron’s guidance is pricing in an assumption that hyperscaler capex stays elevated indefinitely — and any signal of AI spending fatigue from the cloud giants could send memory stocks sharply lower. Cyclical memory markets have punished investors before. But for now, the structural AI demand story has the upper hand.

Label Change, Large Payout: a2 Milk’s China Approvals Open Path for Shareholder Value

While Wall Street was fixated on semiconductors, a quieter but significant win landed for Aussie investors on the ASX.

The dividend

The a2 Milk Company (ASX: A2M) announced a special dividend of NZ$300 million, conditional on receiving China SAMR approval for its branded infant formula registrations. That approval came through on June 22 — covering two labels previously acquired with the Pokeno facility purchase. The special dividend sits on top of the ordinary dividend, and the size of it signals that management has real confidence the China market is normalising.

Why it matters

Infant formula registrations in China had been a regulatory overhang for a2 for several quarters. The SAMR pathway had stalled near-term earnings growth, with investors uncertain whether the newly acquired labels would clear the approvals process. A resolution would remove a key blocking point from the company’s China growth story — a market that still accounts for a substantial portion of a2’s revenue.

What to watch

The China infant formula market has been shrinking structurally as birth rates decline, but a2 has been taking share within it. With the regulatory uncertainty now resolved, the focus shifts back to whether the company can grow premium pricing power in a more competitive but clearer environment. The NZ$300 million payout is a strong statement that management thinks the answer is yes.

Some other things we’re shining the Spotlight on:

1. ILUKA LOCKS IN FIRST RARE EARTHS CUSTOMER: Iluka Resources (ASX: ILU) announced on June 23 its first bindingrare earths offtake agreement with a global automotive customer, securing minimum revenue of approximately US$155 million over an initial four-year term beginning 2028, with upside to US$172 million at industry-forecast pricing. The deal covers neodymium, praseodymium, dysprosium, and terbium oxides from the Eneabba refinery — representing roughly 10% of planned rare earth production. It’s the commercial validation the market has been waiting for since Iluka committed to building Australia’s first integrated rare earth refinery.

2. WISETECH CHAIRMAN RESPONDS TO AFP PROBE: WiseTech Global (ASX: WTC) Chairman Richard White denied involvement in human trafficking on June 22 after the Australian Federal Police’s human exploitation taskforce initiated a probe into claims he used a woman’s immigration status for sex. White’s legal team has denied the claims. The company simultaneously appointed Zubin Appoo as permanent CEO, effective immediately — Appoo held a foundational role at WiseTech between 2004–2018 and worked directly with White before departing. The dual headlines made for an uncomfortable week for shareholders.

3. COMPUTERSHARE GOES ON-CHAIN: Computershare (ASX: CPU) upgraded FY2026 management EPS guidance to approximately AUD 144 cents per share and lifted its interim dividend to A$0.55, backed by a new partnership with Securitize enabling US issuers to bring equity on-chain. The blockchain adoption angle gives Computershare a first-mover story in digital asset infrastructure at a time when tokenisation of traditional assets is moving from concept to commercial reality.

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