Morning Forecast: Wednesday 27 May
Iran deal in days, Micron crosses $1 trillion, and New Zealand warns hikes are coming into a housing slump.
This content is for informational and educational purposes only and does not constitute financial advice. Always do your own research. Not financial advice (NFA).
👀 Today’s Stories at a Glance
💾 Micron Joins Trillion-Dollar Club: UBS tripled its price target as AI memory contracts break the chip cycle’s brutal boom-bust pattern.
🛢️ Oil Slides on Iran Framework: Brent near $95 and WTI under $90 as Washington and Tehran near a 60-day Hormuz pause.
🚪 BP Fires Chair Over Conduct: Manifold gone eight months in over governance concerns, BP's third chair in under three years.
🌍 Germany Anchors Canadian LNG Project: SEFE signs for 1 million tonnes a year over 20 years, becoming Ksi Lisims’ third anchor buyer.
🏠 New Zealand Stuck Between Shocks: Rates held at 2.25% but hikes now likelier than cuts as oil pushes inflation above 4%.
🌱 Hyperscalers Split on Clean Power Rules: Google and Microsoft back hourly matching; Meta and Amazon want looser rules favoring impact financing.
⚡ Europe Winter Power Hits Crisis Levels: German winter power above €110/MWh as gas storage sits 38% full versus the 90% November target.
🪖 Israel Targets Hamas Military Head: Strike on Mohammed Odeh 11 days after killing his predecessor, threatening the US-backed ceasefire.
🧠 One Big Thing
Micron just crossed $1 trillion because UBS made one bold call: AI has fixed memory's biggest problem. Memory chips have always swung between glut and shortage, which is why investors gave the sector a low valuation. UBS argues that long-term contracts with AI customers, locked in at fixed prices, have ended that cycle. If that's right, Micron deserves to trade like a steady earner instead of a cyclical. If it's wrong, the stock has a long way to fall. Watch whether HBM prices hold into 2027, because that's the whole thesis.
⚖️ Fear & Greed
📉 The Number That Matters
$1,625
UBS's new Micron price target, more than triple the prior $535 call. The $1,625 target reframes memory as a structural artificial intelligence (AI) play, betting long-term high-bandwidth memory (HBM) contracts have killed the chip cycle's boom-bust pattern.
⚔️ Winners vs Losers
Winners
MNTS 0.00%↑: Momentus Inc. extended its blistering rally after the space-logistics company reported a 786% sequential jump in Q1 service revenue to $3.2 million on the back of its Vigoride 7 mission, eliminated going-concern risk, and grew its government pipeline across DARPA, AFRL, Space Force SDA and the Missile Defense Agency.
DY 0.00%↑: Dycom Industries Inc. ripped after reporting record Q1 fiscal 2027 results that smashed expectations, with contract revenues up 56.1% to $1.96 billion, adjusted EPS of $4.42 versus $2.39 a year ago, and a record $11.9 billion backlog driven by fiber and data center build demand.
LFVN 0.00%↑: Lifevantage Corporation extended a sharp two-day move with no specific catalyst identified, in what appears to be a low-float short-squeeze continuation after the stock closed up 23.53% on Tuesday and ran another 27% in after-hours trade.
APPS 0.00%↑: Digital Turbine Inc. jumped after blowing past Q4 fiscal 2026 estimates with EPS of $0.16 versus $0.09 expected and revenue of $142.5 million versus $135.9 million, while guiding fiscal 2027 above consensus on accelerating App Growth Platform revenue (+57% YoY).
CPSH 0.00%↑: CPS Technologies Corp. continued a momentum-driven breakout with no concrete fundamental catalyst identified, as the micro-cap defense and metal-matrix-composites name rode chart-driven inflows on heavy volume into a fresh multi-year high.
RDW 0.00%↑: Redwire Corporation hit fresh 52-week highs as the SpaceX IPO filing for a potential $2 trillion valuation lifted the entire commercial-space complex, compounding momentum from recent Penguin Mk3 NATO contract wins and the DARPA Otter program.
TE 0.00%↑: T1 Energy Inc. continued its sharp rally as investors kept rewarding the narrower Q1 net loss, 233% revenue surge to $177.7 million, reaffirmed 3.1–4.2 GW production guidance, and progress toward closing the $225 million G2_Austin financing package.
BBWI 0.00%↑: Bath & Body Works Inc. opened sharply higher after Q1 results topped guidance with adjusted EPS of $0.32 on $1.4 billion in sales and the company reaffirmed full-year EPS guidance of $2.40 to $2.65, though the announcement was tempered by CFO Eva Boratto stepping down June 12.
MU 0.00%↑: Micron Technology Inc. ripped to fresh highs and joined the trillion-dollar club after UBS more than tripled its price target to $1,625 from $535, citing long-term supply agreements that the analyst said will structurally transform the company’s earnings profile as HBM and DRAM demand for AI workloads outstrips supply.
RKLB 0.00%↑: Rocket Lab Corporation extended gains following last week’s $90 million U.S. Space Force contract win for two geostationary Heimdall satellites, paired with broad space-sector tailwinds from the SpaceX IPO filing and a successful Synspective Electron launch.
Losers
VRRM 0.00%↑: Verra Mobility Corporation collapsed after Avis Budget Group delivered notice terminating its commercial services agreement effective September 2026, prompting the company to cut its 2026 outlook and warn of $135 to $145 million in annualized revenue and roughly $120 to $125 million in segment profit impact.
ZS 0.00%↑: Zscaler Inc. tumbled after Q3 fiscal 2026 results delivered an EPS and revenue beat but were overshadowed by mixed guidance, with free cash flow margin guided to 22.8% to 23.3% versus a prior 26.5% to 27% expectation as capex steps up to high single digits as a percent of revenue.
PDD 0.00%↑: PDD Holdings Inc. slid after Q1 2026 results badly missed expectations, with EPS coming in at roughly $11.23 versus the $18.70 consensus and revenue of RMB94.87 billion well short of the RMB103.4 billion estimate, as the ¥100 billion merchant support program continued weighing on profitability.
📊 Market Snapshot
Cryptocurrencies:
Bitcoin (BTC): $75,729 (▼ -0.16%)
Ethereum (ETH): $2,080 (▲ 0.39%)
XRP: $1.33 (▲ 0.06%)
Equity Indices (Futures):
S&P 500: $7,560 (▲ 0.30%)
NASDAQ 100: $30,277 (▲ 0.68%)
FTSE 100: £10,503 (▼ -0.05%)
Commodities & Bonds:
10-Year US Treasury Yield: 4.48% (▼ -0.31%)
Oil (WTI): $90 (▼ -3.30%)
Gold: $4,439 (▼ -1.50%)
Silver: $73.88 (▼ -3.94%)
Data as of: UK (BST) 12:40pm / US (EDT): 8:40am / Asia (Tokyo): 9:40pm
✅ 5 Things to Know
💾 Micron Cracks $1 Trillion on the AI Memory Boom
Micron Technology crossed $1 trillion in market value for the first time yesterday, after UBS roughly tripled its price target to $1,625 from $535, the highest call on Wall Street. Shares jumped about 19%, lifting the Nasdaq Composite to a record 26,656 and the S&P 500 to a record 7,519, while the Dow slipped as oil prices fell. UBS argues that artificial intelligence has broken memory’s brutal boom-and-bust cycle: long-term supply contracts with partly fixed pricing and sold-out high-bandwidth memory (HBM, the fast memory stacked right next to AI chips) give Micron steadier earnings that deserve a higher valuation. The stock is up more than 800% over the past year and has more than tripled in 2026. (CNBC)
The move widens the AI trade well beyond Nvidia’s processors to the picks-and-shovels names: memory, storage and power. The whole chip complex re-rated with it, with chip exchange-traded funds like the VanEck Semiconductor ETF (SMH) up 3% to a 52-week high, ON Semiconductor and Western Digital both near 9%, and AMD up 6%. The next thing to watch is whether memory pricing holds, since Micron’s 2026 HBM output is already sold out and rivals SK Hynix and Samsung are raising prices into a global shortage. One number reframes the day: even at $1 trillion, Micron is only about 1.5% of the S&P 500, a fraction of the Magnificent Seven’s 6%-plus weights, yet it added more to the index yesterday than any of those giants. (Yahoo Finance)
Sensei’s Insight: Memory used to be the boring, boom-bust corner of chips that investors ignored. The entire bet here is that AI supply contracts have ended that cycle. If memory prices crack the way they always have before, a trillion-dollar Micron has a long way to fall.
🛢️ Oil Hits Two-Week Low as Iran Deal Edges Closer
Oil fell to a two-week low yesterday, with Brent around $95 a barrel and US crude (West Texas Intermediate) briefly under $90, as Washington and Tehran moved closer to a framework to halt their war and reopen the Strait of Hormuz, the chokepoint for about a fifth of the world’s seaborne oil. Secretary of State Marco Rubio said an initial agreement could be “a few days” away after talks in Doha, where Iran’s central bank governor joined to discuss releasing frozen Iranian funds. The proposed deal would give negotiators 60 days, lift the US naval blockade and get the strait de-mined. The ceasefire frayed again, though, after overnight US “self-defense” strikes in southern Iran. (Al Jazeera)
For everyday investors this is the gas-pump and inflation story. US pump prices have run about $1.50 a gallon above pre-war levels, near $4.50, keeping the Federal Reserve cautious about cutting rates. A signed framework could push oil toward the high $80s and ease that pressure, while a collapse points back toward the spring’s $138 Brent peak. The sticking points are still Iran’s enriched-uranium stockpile and its demand to keep “managing” the strait, which Rubio called unacceptable. The 60-day clock would push the next ceasefire deadline to late July or early August. Even if a deal lands, the United Arab Emirates’ exit from the OPEC oil group has thinned the cartel’s spare production capacity, so prices stay jumpy. (NBC News)
Sensei’s Insight: What traders are pricing isn’t peace, it’s a 60-day pause that reopens the strait and leaves the nuclear fight for later. Enough to take the edge off gas prices, but with OPEC’s spare cushion now thinner, any fresh flare-up snaps oil straight back up.
🚪 BP Fires Its Chairman After Just Eight Months
BP fired its chairman, Albert Manifold, yesterday after just under eight months in the job, saying the board had unanimously decided he should leave immediately over “serious concerns” related to “important governance standards, oversight and conduct.” Senior independent director Amanda Blanc, who had hired Manifold in October, said the board was “surprised and disappointed” by conduct it deemed unacceptable, though BP gave no specifics. The shares fell nearly 10% and were briefly halted before paring the drop to about 4%. Ian Tyler, a non-executive director, takes over as interim chair. Manifold, the former boss of building-materials group CRH, had been brought in to speed up BP’s turnaround. (Bloomberg)
This is BP’s third chairman in under three years, on top of five chief executives since 2020, including new boss Meg O’Neill, Big Oil’s first female and first external CEO, who only arrived April 1 and was Manifold’s own hire. The upheaval lands as BP tries to sell investors on a “reset” back to oil and gas after a failed renewables push, with activist Elliott Investment Management holding about 5% and declining to comment yesterday. The risk for shareholders is that constant boardroom churn keeps BP trading at a discount to Shell and Exxon no matter how sound the strategy. The thing to watch now is whether O’Neill’s plans, including the Castrol lubricants review and asset sales, lose momentum without the chair who backed her. (Rigzone)
Sensei’s Insight: Manifold was the change agent who pushed BP back toward oil and recruited O’Neill. Losing him eight months in, with no explanation, leaves the new CEO exposed and the board looking chaotic. Investors wanted stability and got one more reason for BP’s discount to rivals.
🌍 Canada Signs Germany to a Big Pacific LNG Deal
Canada is signing a large liquefied natural gas (LNG) supply deal with Germany’s state-owned SEFE today, with the announcement made in Vancouver by Natural Resources Minister Tim Hodgson alongside Nisga’a Nation President Eva Clayton. SEFE is committing to buy 1 million tonnes a year for up to 20 years, starting in the early 2030s, from the planned Ksi Lisims export terminal on the coast of British Columbia. That makes the German utility the project’s third anchor buyer after Shell and TotalEnergies, which hold contracts for 2 million tonnes each. The agreement is structured so SEFE can reroute cargoes around the world through financial swaps rather than necessarily shipping Pacific gas physically to Europe. (The Globe and Mail)
Germany has scrambled to replace Russian gas since 2022, and adding Canadian Pacific supply hedges its heavy reliance on US gas, which made up about 96% of its terminal imports last year, just as Middle East supply looks shaky. For the project itself, locking in a third buyer de-risks a final investment decision (FID) that backers want this year. That decision is the real catalyst: a green light would lift Canadian gas producers in the Montney region of British Columbia and Alberta, names like Tourmaline Oil, ARC Resources and Ovintiv, and open a fresh outlet for North American gas. It would also chip away at the pricing power of US developers such as Cheniere and Venture Global when their own contracts come up for renewal. (Reuters)
Sensei’s Insight: The gas may never physically reach Germany, since the swaps let SEFE send cargoes wherever they fetch the most. What matters is the signature. A third 20-year buyer is what banks want to see before financing Ksi Lisims, so this nudges a final go-ahead decision closer this year.
🏠 New Zealand’s Housing Bust Now Has an Inflation Problem
New Zealand’s central bank held its key interest rate at 2.25% today, but the message was a warning rather than relief. The Reserve Bank of New Zealand, under Governor Anna Breman, signaled it is now likelier to raise rates than cut, because the Iran war’s oil shock is set to push New Zealand inflation above 4% for the rest of 2026. Economists broadly expect hikes back toward 3% by year-end. That collides with a housing market that peaked in late 2021 and is still down about 18% nationally, with Auckland and Wellington both off more than 20% from their highs, leaving the wider economy growing at a crawl. (RNZ)
New Zealand has become the cautionary tale for any economy that leaned on forever-rising house prices, from Australia to Canada to parts of Europe. Prices rose roughly 600% from the mid-1990s to the 2021 peak, so the unwind keeps dragging on household wealth, spending and homebuilding even with rates well below their own highs. The twist now is that the central bank cannot ease into that weakness, because imported oil inflation is forcing it the other way. The next things to watch are tomorrow’s national Budget and the bank’s fresh forecasts, its first full set since the oil shock. The strain is already showing in a weak New Zealand dollar and is watched closely by the big Australian banks that run large mortgage books across the Tasman. (Bloomberg)
Sensei’s Insight: The old playbook was simple: house prices wobble, the central bank cuts, buyers come back. That’s broken. With oil pushing inflation above 4%, New Zealand’s central bank may have to raise rates into a housing slump, and homeowners get squeezed from both sides.
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🌱 Big Tech Splits Over How to Count Clean Power
The body that sets corporate carbon-accounting rules is rewriting how companies count the electricity they buy, and the biggest tech firms are split. Google and Microsoft back stricter “hourly” matching, which means proving clean power was generated at the same time and in the same place it’s used. Meta and Amazon favor an “impact” approach that gives credit for financing clean power in dirtier grids. The fight matters because it decides whether hyperscalers can keep calling their AI data centers “100% renewable,” and tighter rules would favor firm, round-the-clock supply like nuclear and geothermal over standalone wind and solar. Investors managing more than $1.2 trillion back the stricter version, with a final standard due around 2027. (Reuters)
⚡ European Winter Power Prices Hit a 2022 High
The premium on European electricity for next winter has climbed to its highest since the 2022 energy crisis, as weak gas storage, poor hydropower and Middle East tension squeeze the supply outlook. Gas storage across the region sits only about 38% full, far below the European Union’s 90% target for November, while German winter power has pushed above €110 a megawatt-hour and Italian winter power above €120. It’s a reminder that even with oil easing on Iran-deal hopes, Europe’s energy security is still fragile heading into the cold months. The pressure falls on utilities, heavy industry and the region’s inflation path. (Reuters)
🪖 Israel Strikes Hamas’s New Military Chief in Gaza
Israel said it carried out a strike targeting the newly appointed head of Hamas’s armed wing in Gaza, Prime Minister Benjamin Netanyahu announced, though Israel did not confirm whether the target, reported to be Mohammed Odeh, was killed. It comes 11 days after Israel killed his predecessor, Izz al-Din al-Haddad, the most senior Hamas figure hit since the US-backed ceasefire in October. The repeated strikes on Hamas commanders harden the group and complicate the post-war plan Washington is trying to broker. Direct market impact is muted, but a full ceasefire collapse would lift defense names and add to the regional risk premium already in play from Iran. (Reuters)
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This content is for informational and educational purposes only and does not constitute financial advice. Always do your own research. Not financial advice (NFA).