By Britney Nguyen and Bill Peters

Micron is increasingly important to the S&P 500, and its earnings report has become 'a market event in and of itself'

Micron Technology reports earnings on Wednesday.

Micron Technology may be about to steal Nvidia's thunder and underscore its increasing relevance to the broader stock market.

When the memory-chip maker reports earnings on Wednesday, it's expected to deliver major profit growth. Analysts tracked by FactSet expect earnings per share to have rocketed 940% higher in the August quarter relative to a year before.

The results for Micron (MU) will arrive as the artificial-intelligence boom gobbles up memory-chip supplies and squeezes prices higher, creating a profit windfall for the company. And if analysts' predictions hold, it would mark the first time in at least two-and-a-half years that Micron manages to dethrone Nvidia (NVDA) and its Big Tech peers to become the leading contributor to the S&P 500's SPX profit growth, according to data from Seaport Research Partners.

Micron's stock has made a 279% run higher so far this year, although shares have had their ups and downs over the past three months. The company has a $1.2 trillion market valuation, and its results are closely watched as a gauge of AI demand.

The company sits at the intersection of two of the market's main themes: the durability of AI spending and a recent concentration in market leadership, Jake Behan, Direxion's head of capital markets, told MarketWatch. Against that backdrop, the stock is one of a handful of companies that's driven the Nasdaq Composite COMP to all-time highs.

"When you have leadership that's this narrow, it stops being company-specific, and the report becomes a market event in and of itself," Behan said. Micron's stock has "become a referendum on the health of the AI build-out," he added.

Moreover, Jacob Bourne, a technology analyst at Emarketer, told MarketWatch that Micron's results "should offer a useful indication of whether strength is broadening beyond AI infrastructure."

The stock market this year has battled concerns surrounding the cost of the AI build-out. Goldman Sachs analysts last month said they expect global AI investment to surpass $1 trillion this year, as big U.S. cloud providers including Amazon.com (AMZN), Alphabet (GOOGL) (GOOG) and Microsoft (MSFT) shovel billions of dollars into data centers and other technology.

Micron's influence on the S&P 500 has been building over the past year. During last year's third quarter, Micron was the ninth-biggest contributor to the index's earnings growth, according to FactSet. As the memory crunch deepened, its rank rose to sixth in last year's fourth quarter, then third over the first half of this year.

While Micron's earnings report doesn't align with the usual calendar schedule that other companies follow, FactSet considers the company's results to be part of the third quarter. The chip maker's report will land before the third-quarter earnings season really kicks into gear next month.

For now, analysts expect S&P 500 earnings to grow 29.1% for the third quarter, according to FactSet. Factor out Micron, and that growth drops to 24%, according to the research firm. But that would still mark the eighth straight quarter of double-digit earnings gains for the benchmark index.

"Even if you threw Micron out of the S&P, the earnings growth is still insanely good," said Jonathan Golub, chief investment strategist at Seaport Research Partners.

-Britney Nguyen -Bill Peters

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