We also break down next week’s catalysts to watch to help you prepare for the week ahead.
In this article:
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
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.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.