Tech Weekly: Stocks See Minor Reprieve Before Ending Week in the Red

This week's tech sector performance

Tariff concerns sent global stocks drifting on Monday (February 23), with US futures pointing lower at the start of the week even though the Nasdaq Composite (INDEXNASDAQ:.IXIC) ended a three week losing streak the previous week.

Additionally, a Citrini Research report published on Sunday (February 22) projects that the dominance of artificial intelligence (AI) could lead to the collapse of the “human-centric consumer economy” and cause widespread unemployment, adding to the growing anxiety around AI-induced displacement.

Markets had a subdued reaction to Anthropic’s announcement ⁠of 10 new AI tools on Tuesday (February 24), including plugins that could help with investment banking tasks, private equity engineering and design.

Mohit Kumar, chief Europe economist at Jefferies Financial Group (NYSE:JEF), noted that, although AI disruption will remain a market theme for the foreseeable future, the company’s emphasis on “partnership rather than displacement” may have spurred a software sector rally in Tuesday afternoon trading.

Also aiding the software recovery was a handful of experts pushing back against the Citrini report, including a response published by Citadel Securities' Frank Flight, who said the thesis is far-fetched at best.

On Wednesday (February 25), ahead of NVIDIA's (NASDAQ:NVDA) much-anticipated earnings report, tech stocks boosted indexes in North America, Europe and Asia, with the S&P/TSX Composite Index (INDEXTSI:OSPTX) seeing advances in AI-related software and diversified tech amid positive quarterly reports from Canada’s main financial institutions; meanwhile, semiconductor companies led gains on Wall Street.

While positive sentiment lifted Canada’s main index to a new record on Thursday (February 26), the US had a weaker session after investors were unimpressed with NVIDIA'S results.

Although NVIDIA beat expectations, guidance shows deceleration. A 3.2 percent drop in the PHLX Semiconductor Sector (INDEXNASDAQ:SOX) index dragged the Nasdaq down to close 1.2 percent lower.

Indexes in Canada and the US slipped on Friday (February 27) as renewed positive sentiment from earlier in the week ultimately gave way to concerns over AI-led disruptions.

3 tech stocks moving markets this week

1. NVIDIA (NASDAQ:NVDA)

NVIDIA, which makes up almost 8 percent of the S&P 500 (INDEXSP:.INX), was up on Wednesday ahead of its Q4 earnings report, which showed US$68.1 billion in revenue, an increase of 73 percent. Net income was up 94 percent to US$42.9 billion, and the company generated US$96.6 billion in free cashflow for the year.

The results exceeded analysts’ estimates, but shares were flat in after-hours trading, despite CEO Jensen Huang's claim of “skyrocketing” AI agent adoption and sales growth of 78 percent for the current quarter.

2. Salesforce (NYSE:CRM)

Salesforce rose modestly intraday ahead of its Q4 earnings release on Wednesday, which showed revenue growth of 12 percent year-on-year, beating analysts' estimates at US$11.2 billion. Full-year revenue was at US$41.5 billion, up 10 percent, with the company reporting remaining performance obligations of US$72.4 billion, a 14 percent increase.

Annual recurring revenue from the company’s AI agent platform, Agentforce, led quarterly gains, reaching US$800 million, up 169 percent. Despite CEO Marc Benioff’s revenue projection of US$63 billion by the 2030 fiscal year, 2027 fiscal year guidance of US$45.8 billion to US$46.2 billion was below the consensus estimate of US$46.06 billion, which sent shares down around 5 percent in after-hours trading. The company also said it anticipates a slowdown in core business expansion, projecting organic growth of only 7 to 8 percent for the upcoming fiscal year.

2. Dell Technologies (NYSE:DELL)

Dell Technologies was trading higher ahead of its Q4 earnings. The firm delivered revenue of US$33.4 billion, beating estimates, and full-year revenue of a record US$113.5 billion.

Sales of AI servers hit US$9.8 billion, up 100 percent year-on-year, with a US$64 billion AI pipeline and US$43 billion backlog. Earnings per share topped estimates of US$2.36, coming in at US$2.86.

Momentum continued after hours following CEO Mike Dell’s comments on “skyrocketing” hyperscaler demand for AI infrastructure despite some margin pressure, with Dell’s share price soaring about 11 percent.

Top tech news of the week

• Alphabet (NASDAQ:GOOGL) was upgraded to “overweight” from “equal weight” at Wells Fargo (NYSE:WFC), with a price target of US$387, up from US$354. Analysts cited the company’s “leadership position” in customer data, distribution and compute capacity.

• Finland's IQM Quantum Computers plans to go public via a SPAC merger with Real Asset Acquisition (NASDAQ:RAAQ), valuing the firm at about US$1.8 billion. IQM plans to list its American depositary shares on the NYSE or Nasdaq, and is also considering a listing on the Helsinki Stock Exchange.

• While other software stocks rose on news that Anthropic’s Claude AI could reduce the time and effort required for COBOL modernization, which previously relied on extensive consultant work, shares of IBM (NYSE:IBM) fell sharply. Market participants view the development as directly threatening IBM’s lucrative consulting services revenue.

• Advanced Micro Devices (NASDAQ:AMD) shares jumped over 6 percent on Tuesday after the firm announced an expanded multi-year AI chip partnership with Meta. The deal, potentially valued at as much as US$10 billion, includes AMD’s MI450X and MI500 chips powering Meta’s next-gen infrastructure.

• Intrinsic, an Alphabet-owned company specializing in AI and software for industrial robots, is joining Google. Intrinsic will operate as a distinct entity within Google, where it will collaborate with Google DeepMind and leverage Google's Gemini AI models and cloud services to accelerate physical AI work.

• CoreWeave (NASDAQ:CRWV) reported Q4 revenue of US$1.57 billion, up 110 percent year-on-year and ahead of estimates; however, its forward guidance for the year missed estimates amid CAPEX spending projected between US$30 billion and US$35 billion. Shares fell 12 percent.

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) advanced by 1.83 percent, while the Invesco PHLX Semiconductor ETF (NASDAQ:SOXQ) advanced by 1.77 percent.

The VanEck Semiconductor ETF (NASDAQ:SMH) also increased by 1.76 percent.

Tech news to watch next week

Next week there will be light earnings, with results expected from MongoDB (NASDAQ:MDB), Alibaba (NYSE:BABA) and Broadcom (NASDAQ:AVGO); however, macro data alongside speeches from US Federal Reserve presidents will dominate alongside tariff developments and AI CAPEX and inflation concerns.