Chip and AI stocks pulled Wall Street around all day Friday, and the tug-of-war left the major indexes split. The Nasdaq Composite dropped 0.6% while the S&P 500 hovered near flat and the Dow gained 149 points, or 0.3%, helped by a 3% jump in Apple.
The move followed a brutal Thursday. The "Magnificent Seven" stocks together lost nearly $800 billion in market value as investors reacted to ballooning AI spending plans. Tesla plunged 14.52% after weak profits, its worst earnings-reaction day on record, and Alphabet fell 7.1% after raising its 2026 capital spending plan to as much as $205 billion.
The selling in chips carried into Friday even where results were strong. Intel fell despite second-quarter numbers that beat Wall Street's expectations, and other semiconductor names slid with it.
- Intel dropped 6% after its earnings beat, reversing earlier gains.
- Broadcom and Advanced Micro Devices each fell 3%, while Micron Technology declined 8%.
- Corning lost 3% and photonics firms Coherent and Lumentum dropped roughly 7% each on worries about hyperscaler AI budgets.
Investor Michael Burry said he added to short bets against Nvidia and a semiconductor ETF, arguing that "much and possibly most" AI infrastructure demand is financed off balance sheet in a circular arrangement.
Two mega-cap-heavy groups took the week's biggest losses. Communication Services and Consumer Discretionary each fell roughly 6%, dragged by Alphabet and Tesla.
Even with Friday's split, all three indexes were tracking weekly losses, with the Nasdaq on pace to fall more than 2%. Deutsche Bank expects Meta to report strong earnings on Wednesday, lifting its revenue estimate to $60.5 billion, slightly above consensus.
