Friday was a rough day for semiconductor stocks, with the Vector Semiconductor ETF (SMH) dropping 3.5%.
Leading the decline was Applied Materials (AMAT), which fell nearly 10%, closing below $170. The selloff was sparked by the company’s disappointing Q1 revenue guidance, revealed in its earnings report late Thursday.
While AMAT delivered strong Q4 results, the lack of positive forward guidance overshadowed the upside surprise.
This comes at a time when semiconductor stocks have been riding high on optimism surrounding the AI chip trade.
Investors have bid up these stocks, expecting continued momentum, but the recent trend of underwhelming forecasts is forcing a reevaluation of valuations.
If the market’s elevated expectations prove to be too high, AMAT and its peers could face further declines as investors revalue the sector.
The cautious outlook from AMAT also sent ripples through the AI industry, hitting shares of ARM Holdings (ARM) and raising questions about the broader semiconductor industry.
All eyes now turn to NVIDIA (NVDA), which reports earnings next week. Any hint of weakness in NVIDIA’s results or outlook could trigger widespread selling across semiconductor and AI-focused stocks.
Technically, AMAT shares have broken below $170, a key level that had served as support over the past month. This breakdown sets the stage for a potential decline toward $150, the next significant support level.
Investors should proceed with caution as the semiconductor sector navigates a challenging landscape of high expectations and uncertain forecasts.
With NVIDIA’s report on the horizon, the stakes couldn’t be higher for the AI chip trade.
Palantir Technologies (PLTR) was the standout performer in the S&P 500 on Friday, surging 9% on heavy trading volume.
The rally followed the company’s announcement that it will transition from the New York Stock Exchange (NYSE) to the NASDAQ exchange, effective November 28. This strategic shift wil have significant implications for Palantir’s stock.
Read more on Palantir’s move to the Nasdaq here.
One major catalyst for today’s rally is the potential for Palantir to be added to new index funds and ETFs.
At its current market valuation, Palantir qualifies for inclusion in the Nasdaq 100 Index ETF (QQQ), a prestigious group of the 100 largest non-financial companies listed on the NASDAQ.
As the second-largest index behind the S&P 500, inclusion in the Nasdaq 100 would require index funds to purchase Palantir shares, further boosting demand.
This isn’t the first time index inclusion has sparked a rally for Palantir.
In September, the stock gained 25% after being added to the S&P 500. With that example as a guide, the NASDAQ shift could provide another strong tailwind for Palantir shares.
Friday’s surge propelled Palantir to new all-time highs.
Price targets for Palantir are $80 over the next six months and $100 within the next year. Those targets will increase when Wall Street analysts begin to upgrade the stock, something that hasn’t happened yet.
Investors are betting big on Palantir’s growing influence in the AI-driven technology space, and this exchange transition only strengthens its position as one of the strongest AI Service companies.
Amazon.com (AMZN) shares tumbled nearly 5% today, marking a sharp decline from their recent all-time highs. The selling came on heavy volume as the broader Nasdaq 100 index also faced significant pressure.
This was Amazon's worst one-day performance since August 2, when the stock fell following its second-quarter earnings report.
Today’s selloff reflects a combination of factors. The market, already overbought, reacted to a surge in interest rates that has rekindled concerns about the Federal Reserve’s next move.
Investors are beginning to factor in the possibility that the Fed may need to pause at its next meeting in December, adding to market jitters.
Despite the pullback, Amazon’s technical picture remains intact for now.
Shares are trading above the 50-day moving average, which is currently in a bullish trend and providing support around $190.
However, with additional market volatility expected next week - particularly surrounding NVIDIA’s highly anticipated earnings report on Wednesday - a dip below this key level cannot be ruled out.
Amazon is likely to target a move to $175 if the stock breaks below its 50-day moving average. A move to that price would likely trigger interest from investors to buy the dip in the stock during the holiday shopping season.
The $175 level represents a key buying opportunity for those who see the recent pullback as a chance to capitalize on Amazon’s long-term growth potential.
As one of the top Nasdaq 100 stocks, Amazon remains a stock to watch closely. The combination of market conditions and upcoming catalysts may contribute to broader market weakness.
Shares of Amazon remain in a long-term bull market trend with a price target of $300.
