Tech Weekly: Q3 Sets Off on Shaky Footing

This week's tech sector performance

The first full trading week of Q3 was mixed.

Monday’s (July 6) market tone had a geopolitical overhang after the weekend saw rising shipping risk.

Despite a report on an Nvidia server delay jolting tech shares in Asia, a rally in US trading lifted the Nasdaq-100 (INDEXNASDAQ:NDX) by about 1.3 percent following Broadcom (NASDAQ:AVGO) and Apple (NASDAQ:AAPL) announcement of an extended partnership to 2031.

SK Hynix (KRX:000660,OTCPL:HXSCL) also began its marketing process for a US listing.

However, stock futures were deep in the red on Tuesday (July 7) morning following an attack on an LNG tanker in the Strait of Hormuz. Chip stocks erased gains, despite Samsung reporting explosive revenue growth.

The slide continued on Wednesday (July 8) as investors fled risk assets after US President Donald Trump, at the NATO summit in Turkey, said the memorandum of understanding signed with Iran to end the Gulf conflict was “over.”

Cautious, risk-off sentiment persisted on Thursday (July 9), though some sessions saw a partial rebound. Hardware and chip names bounced, but persistent skepticism regarding the returns on AI investments kept software firms and large-scale hyperscalers under pressure.

A blockbuster ⁠Nasdaq debut of SK Hynix on Friday (July 10), which opened 14 percent above its offering price at US$170, fueled AI optimism and helped boost the index to finish the day at 26,281.61, up 0.29 percent and 1.74 percent above this week’s opening level. Markets were further buoyed after President Trump said that Iran and the US agreed to continue talks.

The AI trade showed resilience this week, but comments shared with the Investing News Network by Bitfire Chief Economist Fu Peng warn that the US stock market is extremely concentrated in a small number of mega-cap technology and semiconductor companies.

Citing the ratio between the S&P 500 and the Dividend Aristocrats Index, which signals a divergence between institutional defensive positioning and overall market growth, and the VIX/VIXEQ ratio, Peng argued that mega-cap tech stocks are artificially suppressing market-wide volatility metrics. These structural imbalances are nearing a critical breaking point, potentially signaling an imminent forced rebalancing.

3 tech stocks moving markets this week

This week's top tech stock movers, according to TradingView data, were:

1. Meta Platforms (NASDAQ:META)

Meta Platforms led gains with a 10.09 percent improvement.

2. Broadcom (NASDAQ:AVGO)

Broadcom saw its share price rise 9.36 percent this week.

3. Dexcom (NASDAQ:DXCM)

Dexcom saw a gain of 8.42 percent.

Top tech news of the week

On Monday, Broadcom and Apple said they would expand an existing partnership to develop custom chips, with Broadcom agreeing to develop and supply custom ASIC silicon for multiple future Apple products through 2031.

Brookfield’s Data Center Firm, Csquare, filed for an IPO, seeking up to US$1.35 billion.

Despite Wall Street analysts’ overwhelmingly bullish reports on SpaceX (NASDAQ:SPXC) - with the caveat that massive long-term investments are required and free cash flow not expected until 2035 - shares of SpaceX fell with the broader market on Tuesday after the newly public company was added to the Nasdaq 100 index. This week, the company launched Grok 4.5, its first model built in collaboration with Cursor.

South Korean memory chip maker SK Hynix US ADR made its debut on the Nasdaq Composite (INDEXNASDAQ:.IXIC) on Friday. Its main listing will stay in Seoul. The memory chipmaker has been a major beneficiary of the infrastructure boom. The company rose US $26 billion and closed ___ percent above its opening price, hitting a intraday high of US$____.

OpenAI officially launched its advanced GPT-5.6 model on Thursday after the administration initially delayed a broader rollout over national security concerns. The company also released GPT-5.6 Sol, Terra and Luna this week.

Microsoft (NASDAQ:MSFT) is reportedly starting to replace OpenAI and Anthropic with its own models in software products like Excel and Outlook. Starbucks (NASDAQ:SBUX) is also said to be replacing Oracle (NYSE:ORCL) and IBM (NYSE:IBM) products with in-house tools.

Meta introduced a new AI video-generation model developed in its rebuilt AI lab called Muse Image, as well as Muse Spark 1.1, an upgrade to its multimodal AI model for agentic tasks, for which the company will charge developers. The company also announced that it would build a US$13 billion data center in Alberta’s Sturgeon County, its first major data center project in Canada and one of its biggest builds overall.

Amazon (NASDAQ:AMZN) held what Bank of America (NYSE:BAC)called a “surprise” bond sale, offering US$25 billion to bring the company’s total debt issued YTD to US$92 billion. Amazon offered 18 to 21 basis points of extra yield on its longest bonds but drew weak demand compared to its offer in March.

Khosla-backed startup PrismML has reportedly developed a method to compress a 27-billion-parameter large language model- Alibaba's (NYSE:BABA) Qwen 3.6 - to fit into under 4 GB of memory and run entirely on an iPhone 17 Pro instead of needing a cloud server.

Tech ETF performance

Tech exchange-traded funds (ETFs) track baskets of major tech stocks, meaning their performance helps investors gauge the overall performance of the niches they cover.

This week, the iShares Semiconductor ETF (NASDAQ:SOXX) closed down 0.13 percent, while the Invesco PHLX Semiconductor ETF (NASDAQ:SOXQ) was up 0.09 percent.

The VanEck Semiconductor ETF (NASDAQ:SMH) gained 0.92 percent.

Tech news to watch next week

Investors will be focused on earnings reports from big US banks, which will kick off the second quarter earnings season next week, along with earnings and guidance from ASML and TSMC on July 15 and July 16, respectively.

June inflation data may also offer insight into the Fed’s likely monetary policy path.