Tech Stocks Tumble on IBM Revenue Miss and AI Profit-Taking; Oil Sector Rallies

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

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The 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.