Story
Tech Stocks Tumble on IBM Revenue Miss and AI Profit-Taking; Oil Sector Rallies
Summary
Major technology and semiconductor stocks experienced a sharp sell-off this week, driven by a significant revenue miss from IBM and disappointing guidance from Netflix, while rising geopolitical tensions boosted oil and gas companies.
A broad market downturn was fueled this week by significant losses in the technology sector, as investors took profits in high-flying artificial intelligence stocks and reacted to weak corporate reports. In contrast, the energy sector provided a rare pocket of strength, with major oil producers gaining on the back of rising crude prices, according to a report from Investing.com.
Technology and Streaming Giants Stumble
Several major tech firms faced steep declines after releasing disappointing financial updates. The most significant loser was IBM, which plunged 28% for the week.
- The company issued preliminary second-quarter revenue of $17.2 billion, falling well short of the $17.86 billion analyst consensus.
- According to the report, the shortfall was caused by a shift in enterprise IT budgets away from IBM's software business and toward hardware infrastructure.
Netflix also dragged on market sentiment, falling approximately 9.2% over the week. The streaming service issued third-quarter guidance that missed Wall Street expectations and announced it would reduce the frequency of its viewership disclosures.
Widespread AI Sell-Off
AdThe negative sentiment extended across the semiconductor and memory sectors amid fears of a slowdown in AI-related spending and general profit-taking.
- Chip designer Arm Holdings was among the hardest hit, falling 16%.
- Other notable decliners included Intel (-11.5%), Qualcomm (-9.3%), Lam Research (-7.9%), and Applied Materials (-6.4%).
- Memory stocks also came under heavy pressure, with Western Digital dropping 13.4% and Micron falling 7.8%.
Energy Stocks Buck the Trend
The energy sector was the week's standout performer, lifted by rising oil prices attributed to U.S. and Iranian strikes. The gains were broad-based across major producers and refiners.
- Marathon Petroleum led the pack with an 8.7% gain.
- Other top performers included ExxonMobil (+7.4%), Phillips 66 (+7.1%), and Chevron (+6.8%).
- ConocoPhillips and Occidental Petroleum also posted solid gains of 4.8% and 4.2%, respectively.
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