Micron lifts Q4 outlook on surging demand for high-bandwidth memory used in AI

South Africa

South African equities edged lower on Monday, with the Top 40 and All Share indices each declining 0.22% to close at 93,282.7 and 100,630.4 points respectively. Meanwhile, manufacturing output surprised to the upside, rising 1.9% year-on-year in June, beating consensus expectations of 1% (Reuters) and 0.8% (Nedbank). Investors are eyeing this week’s economic data releases, including mining production, unemployment, and retail sales. Separately, Energy Minister Dr Kgosientsho Ramokgopa urged Eskom to withdraw its legal challenge against Nersa’s licensing decisions, signalling regulatory support while acknowledging Eskom’s concerns by expediting the finalisation of clear trading rules from one year to just three months.

Europe

European markets were cautious on Monday, with the STOXX 600 retreating 0.1%, pausing near recent highs amid geopolitical and economic uncertainties. Investors await key developments, including tariff negotiations and Friday’s Alaska summit, where concerns persist over potential unilateral U.S.-Russia proposals on Ukraine. In the UK, July retail spending rose 2.5% year-on-year, slowing from June’s 3.1%, as hot weather early in the month faded and food prices climbed. Notably, Norway’s $2 trillion sovereign wealth fund is divesting certain Israeli holdings, citing ethical concerns over Gaza and West Bank activities, reflecting growing ESG pressures that could impact asset managers and multinational investment exposure.

United States

Wall Street ended lower on Monday as investors positioned cautiously ahead of the upcoming U.S. CPI print and assessed ongoing U.S.-China trade developments. Markets are pricing in roughly 60 basis points of Fed rate cuts by year-end, driven by softer labour data and recent changes at the Fed. Meanwhile, major U.S. chipmakers have agreed to remit 15% of Chinese sales revenue to the U.S. government—a move that may weigh on margins and prompt broader export levies. President Trump has extended tariff relief on Chinese goods for 90 days, offering temporary reprieve as retailers prepare for the peak holiday inventory cycle.

Asia

Asia-Pacific markets mostly advanced on Tuesday, led by Japan’s Nikkei 225 hitting fresh highs following news of a 90-day U.S.-China tariff truce extension. The temporary deal has calmed immediate trade tensions, offering both sides more time to negotiate. Investors now turn to the Reserve Bank of Australia’s rate decision, with expectations of a cut. In Singapore, the Ministry of Trade and Industry upgraded its 2025 GDP growth forecast to 1.5%–2.5%, citing stronger-than-expected H1 performance. The economy grew 4.4% in Q2, building on Q1’s 4.1% rise, reflecting resilience in external demand and strengthening confidence in the region’s short-term economic outlook.

Currencies

The rand weakened on Monday, with upbeat June manufacturing data (+1.9% y/y) failing to offset concerns over trade uncertainty, particularly regarding South Africa’s tariff preferences under the U.S. trade framework. Sterling traded flat after reaching a two-week high against the dollar, ahead of key UK labour and GDP figures, which follow a close MPC vote to cut rates. The U.S. dollar held firm on Tuesday, as investors awaited CPI data that could recalibrate Fed expectations. Meanwhile, the Australian dollar traded steadily ahead of the Reserve Bank of Australia’s rate announcement, with markets widely expecting a dovish shift in monetary policy.

Commodities

Oil prices advanced on Tuesday following the U.S.-China decision to extend their tariff truce, easing fears of demand disruption across the two largest energy-consuming nations. The pause supports the global demand outlook ahead of the critical retail season. Meanwhile, gold prices edged higher after Monday’s decline, as markets await U.S. inflation data for clues on the Federal Reserve’s rate path. The 90-day reprieve on tariffs has helped stabilise broader commodity sentiment, particularly in energy and precious metals, where price action has been heavily influenced by macroeconomic policy expectations and geopolitical headlines that continue to drive investor risk positioning.

Rainbow Chicken Limited (RBO) +0.46%

Rainbow has issued a trading statement in line with JSE Listings Requirements, indicating that EPS and HEPS for the year ended 29 June 2025 are expected to rise significantly—between 206% and 226% for EPS (62.02 to 66.07 cents), and between 214% and 234% for HEPS (63.55 to 67.60 cents), compared to the prior period’s 20.25 and 20.26 cents respectively. The performance reflects robust sales volumes, improved agricultural efficiencies, lower commodity input costs, and reduced expenses linked to energy loadshedding and Avian Influenza. Finance costs also declined following the Group’s recapitalisation ahead of its unbundling. Results are due 28 August 2025.

Gemfields Group Limited (GML) 0.00%

Gemfields has agreed to sell Fabergé Limited, its iconic luxury brand, to SMG Capital LLC for a total consideration of USD 50 million. USD 45 million is payable on completion (expected 28 August 2025), with the balance via 8% revenue-based quarterly royalties. The divestment marks the conclusion of Gemfields’ strategic review and reflects a broader shift to streamline its core mining operations. Proceeds will support expansion at Kagem and operational ramp-up at Montepuez. The transaction, classified as a Category 2 deal under JSE rules, does not require shareholder approval and significantly strengthens the Group’s balance sheet.

Italtile Limited (ITE) -0.94%

Italtile reported a subdued performance for FY2025 amid a difficult operating environment characterised by excess industry capacity, muted economic growth, and depressed consumer sentiment. While first-half results were buoyed by the two-pot pension cash injection, momentum slowed in H2. Group system-wide turnover declined, although retail brands CTM, Italtile Retail, and TopT delivered a 2% annual increase. Manufacturing volumes dropped 5% overall, while import operations saw a 3% sales value decline. Gross margins remained flat, reflecting price support efforts. Management expects continued headwinds and margin pressure in the near term but remains focused on operational discipline and long-term resilience.

Micron Technology Inc. (MU) +4.06%

Micron Technology has raised its Q4 revenue forecast to $11.2 billion (±$100 million), up from $10.7 billion (±$300 million), citing strong demand for high-bandwidth memory (HBM) used in AI infrastructure. The company also increased its adjusted gross margin guidance to 44.5% (±0.5%) and expects adjusted EPS of $2.85 (±$0.07), reflecting improved DRAM pricing. Shares rose 3% on the update. Micron continues to benefit from AI-related capex and has pledged $200 billion in U.S. investment. While new 100% chip tariffs may pose risks, domestic production will mitigate the impact. Expansion aligns with long-term structural demand for advanced memory solutions.

AMC Entertainment Holdings Inc. (AMC) +3.41%

AMC Entertainment outperformed analyst expectations in Q2 2025, reporting a 35.6% year-on-year increase in revenue to $1.40 billion, surpassing the LSEG consensus estimate of $1.35 billion. The strong performance was driven by successful theatrical releases including A Minecraft Movie and Lilo & Stitch, which helped revive footfall across its cinema chains. The results reflect resilient consumer interest in theatrical content despite broader headwinds in the media and entertainment sector. While streaming remains a structural challenge, AMC’s ability to capitalise on high-performing titles highlights its enduring appeal and strategic leverage in blockbuster-driven revenue cycles.

Western Union Company (WU) +2.61%

Western Union announced the acquisition of Intermex for $500 million in cash, valuing the U.S.-based remittance firm at $16 per share—a 70% premium to its prior close. The deal strengthens Western Union’s presence in cross-border transfers to Latin America and the Caribbean, where Intermex has strong market penetration. Management expects the acquisition to be accretive to adjusted EPS by over $0.10 in the first full year post-completion. The move reflects Western Union’s strategic focus on regional scale and product diversification amid intensifying competition from fintech challengers. The transaction is a clear signal of consolidation in the global payments space.

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