What Happened?
A number of stocks jumped in the afternoon session after Micron Technology surged on a UBS price target hike that signaled AI hardware demand is structurally undersupplied.
Stocks like Micron Technology (MU) and Advanced Micro Devices (AMD) were at the forefront, with Micron posting an impressive gain of 17.16% and AMD up by 5.68%. Hardware companies (Dell, HPE, Arista, Vertiv, Super Micro) are the picks-and-shovels of the AI buildout: when memory and GPU demand accelerates, server, networking, and cooling orders follow.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Hardware & Infrastructure company Xerox (NASDAQ: XRX) jumped 9.6%. Is now the time to buy Xerox? Access our full analysis report here, it’s free.
- Hardware & Infrastructure company Super Micro (NASDAQ: SMCI) jumped 5.8%. Is now the time to buy Super Micro? Access our full analysis report here, it’s free.
Zooming In On Xerox (XRX)
Xerox’s shares are extremely volatile and have had 57 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 22 days ago when the stock gained 12.5% on the news that the stock continued to rally as the company reported strong first-quarter financial results that significantly beat analyst expectations, driven by its recent acquisition of Lexmark.
Xerox announced first-quarter sales of $1.85 billion, a figure that represented a 27% increase from the previous year and surpassed the analyst consensus estimate of $1.747 billion. The company’s CEO, Louie Pastor, expressed optimism about the future, stating that the results showed “tangible progress” and reaffirmed the company's guidance for 2026.
Adding to the upward momentum, a high level of short interest in the stock, reported to be over 28% of the available shares, likely contributed to the sharp price increase as investors who had bet against the stock were forced to buy shares to cover their positions.
Xerox is up 30.3% since the beginning of the year, but at $3.21 per share, it is still trading 51.8% below its 52-week high of $6.65 from July 2025. Despite the year-to-date gain, investors who bought $1,000 worth of Xerox’s shares 5 years ago would now be looking at only $134.95.
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