The most dangerous words in investing are "This time it's different," warned celebrated fund manager John Templeton. But the market looks convinced that artificial intelligence really is set to break the cycle for chips and other hardware stocks.

Look no further than Micron Technology. The memory-chip maker's share price surged 19% to close at a market valuation of more than $1 trillion on Tuesday. The trigger appeared to be a positive note from UBS arguing Micron's traditionally low price-to-earnings ratio, due to its tendency to go through boom-and-bust cycles, was now outdated as it locks in long-term deals.

Strangely, despite its more than eightfold rise over the past year, Micron still looks cheap at less than 10 times forward earnings. If memory chips are really no longer cyclical, why shouldn't it trade in line with Nvidia's 22 times forward multiple, or even Advanced Micro Devices' 52 times?

The discrepancy suggests Micron's memory chips are seen as a commodity, largely interchangeable with those of its South Korean rivals SK Hynix and Samsung Electronics. But investors seem unsure if the same now applies to Nvidia, while becoming euphoric about stocks in areas such as power chips, optical-networking, and central-processing units.

If Micron's new valuation still suggests some caution, that might not be a bad thing. Analysts at Raymond James estimate AI customers are spending tens of billions on services, but infrastructure companies are counting on about $500 billion in revenue. They calculate customers will have to spend more than $1 trillion annually to justify the current AI buildout.

"It's hard to find any example of a capital spending boom as large, fast, narrow, and privately funded, as AI spending has been, that hasn't ended in a bust period historically," the Raymond James analysts wrote.

Ultimately, it all comes back to Templeton's four dangerous words.

-- Adam Clark

Get more of the journalism you love. Choose Barron's as a preferred source in Google.

Micron Reaches $1 Trillion Market Value. What's Fueling Momentum.

Micron Technology reached a fresh high and hit a $1 trillion market capitalization on Tuesday, according to Dow Jones Market Data. Micron is investing $200 billion to expand manufacturing, including the nation's largest semiconductor factory.

   -- President Donald Trump touted Micron during a public appearance in a New 
      York suburb over the weekend. Micron has said it would invest up to $100 
      billion over 20 years to build the largest chip factory near Syracuse, 
      N.Y. It broke ground on the project earlier this year and is expected to 
      start production in 2030. 
 
   -- Tuesday's performance for Micron's stock was its largest one-day gain 
      since November 2011, and the $163 billion in market cap that it added is 
      about the size of Charles Schwab, according to Dow Jones Market Data. 
 
   -- Wall Street predicts further gains ahead. UBS analyst Timothy Arcuri 
      raised his target price on Micron's stock to $1,625 from $535, 
      reiterating a Buy rating. The target is based on a price-to-earnings 
      ratio of 15 times Arcuri's forecast for Micron's 2029 per-share 
      earnings. 
 
   -- Demand for memory chips has tightened supply. Until recently, companies 
      were wary of adding capacity out of concerns that a slowdown would come, 
      MarketWatch reported, adding that the concerns have allowed memory chip 
      makers to raise prices. Such chips could be undersupplied until halfway 
      through 2028, Acuri said. 

What's Next: At the same time, Apple shares appear headed for a breakout toward $5 trillion in market value, tied to its plans for blending artificial intelligence into its Siri assistant -- expected to be unveiled at the early June developers conference -- and the next wave of iPhones slated for release in the autumn.

-- Adam Clark and Martin Baccardax

Nvidia Unveils $150 Billion-a-Year Taiwan Investment

Nvidia brushed aside concerns about the vulnerability of Taiwan in the chip supply chain as it unveiled plans to spend $150 billion annually with Taiwanese suppliers.

   -- Nvidia CEO Jensen Huang announced the huge spending plan at an event in 
      Taipei to celebrate the launch of the chip maker's new campus in Taiwan 
      on Wednesday. 
 
   -- Huang noted that Nvidia is already spending around $100 billion a year 
      annually in the country, the home of its most important supplier Taiwan 
      Semiconductor Manufacturing. He didn't give a time frame for the 
      increased investment. 
 
   -- The CEO is in Taiwan ahead of the Computex conference, the annual event 
      that acts as a showcase for the self-ruled island's technology industry 
      and a reminder of its vital place in global supply chains. 
 
   -- President Donald Trump suggested earlier this month he might use a $14 
      billion package of U.S. arms for Taiwan that awaits his approval as a 
      "negotiating chip" with China. The comments were made after Trump's 
      summit with China's leader Xi Jinping. 

What's Next: Nvidia's vote of confidence is important amid persistent concerns that Beijing will make a military move against Taiwan, which it considers part of China.

-- Adam Clark

This Year's Biggest Quantum Computing IPO Is Coming

Investors looking for a pure-play bet on quantum computing are about to get their biggest opportunity of the year. Quantinuum, the quantum firm backed by industrial giant Honeywell, has set the terms for its initial public offering and valuation that could reach $12.7 billion.

   -- The company plans to sell nearly 21.1 million shares at an expected price 
      range of $45 to $50 each, for net proceeds of $941.7 million at around 
      the midpoint. This would make Quantinuum the largest quantum company to 
      go public in 2026 so far. 
 
   -- Already, Infleqtion, Xanadu Quantum Technologies, and Horizon Quantum 
      went public through blank-check mergers. Infleqtion and Xanadu were 
      valued at $3.5 billion and $4.5 billion, respectively as of Tuesday while 
      Horizon's valuation had yet to touch $1 billion. 
 
   -- Quantinuum has benefited from a parent company with deep pockets, which 
      could explain why it's the only player taking the traditional IPO route 
      this year. For its less capitalized rivals, SPAC mergers provide a faster 
      and more accessible route to the public market. 
 
   -- The company, and quantum technology at large, recently received an 
      endorsement at the federal level. Last Thursday, it was named one of the 
      companies set to receive $100 million in funding under a push to bolster 
      the domestic quantum supply chain. 

What's Next: Quantinuum is debuting in a red-hot market. As Barron's previously reported, public listings have surged this year following a quiet 2025 spent laying the groundwork behind the scenes.

-- Mackenzie Tatananni

BP's Strategic Reset Faces Boardroom Turmoil With Chairman's Ouster

News that British energy giant BP has removed its chairman, Albert Manifold, came just as investors were settling into a strategic reset, with pressure to shift priorities pushed by outside activists. The move, citing governance and conduct concerns, comes as BP benefits from higher crude prices and stronger profits.

   -- BP's American depositary receipts declined on Tuesday's news, but have 
      risen nearly 22% this year amid the Iran war, higher crude prices, and 
      volatile trading conditions. There has been optimism about BP's renewed 
      focus on fossil fuel businesses after abandoning a pivot toward renewable 
      energy. 
 
   -- Details were scant on Manifold's departure, and he couldn't be reached. 
      But Amanda Blanc, senior independent director at BP, said the board was 
      "surprised and disappointed to learn of governance oversight and conduct 
      issues it deems unacceptable and has taken decisive action." 
 
   -- Ian Tyler will take over as interim chairman. Manifold oversaw the 
      selection of CEO Meg O'Neill in April, who assumed the role with a 
      mandate to focus on its fossil-fuel business. BP's board said it was 
      "very impressed" with O'Neill, and that she would continue as CEO. 
 
   -- The activist firm Elliott Management has built a 5% stake in BP since 
      last year after years of frustration with the company's strategy and 
      execution, arguing that BP suffered from chronic operational 
      underperformance and needed deeper change. 

What's Next: Citi analyst Alastair Syme notes that BP trades at 5.6 times trailing enterprise value to debt-adjusted cash flow -- a valuation multiple used for oil-and-gas companies -- assuming roughly $70 a barrel oil. That's a 5% discount to Shell and a 30% discount to continental European peers TotalEnergies and Eni.

-- Adam Clark, Laura Sanicola, and Janet H. Cho

Pope Leo Warns Against Harms of AI, Data Centers

Pope Leo XIV made an impassioned case against the harms of artificial intelligence and data centers, warning in a letter that the technology brought environmental and social threats, and adding his powerful voice to the burgeoning opposition and resistance that has helped quash billions of dollars' worth of projects this year.

   -- The Pope called out the enormous drain on energy resources by artificial 
      intelligence, which not only requires electricity but water, 
      significantly influencing carbon dioxide emissions, and placing heavy 
      demands on natural resources. "It is essential to develop more 
      sustainable technological solutions," he urged. 
 
   -- Privately held Compass Datacenters, backed by Brookfield Asset Management, 
      last month withdrew its attempts to build an over 800-acre Virginia 
      campus after resistance and increasing regulations. AI proponents have 
      begun saying that AI opponents are being funded by outside sources. 
 
   -- But the sheer breadth of the opposition movement shows that concerns are 

(MORE TO FOLLOW) Dow Jones Newswires

May 27, 2026 06:51 ET (10:51 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.