AI spending fears drag semis lower; Apple reclaims top spot
Renewed concerns over artificial intelligence spending triggered a broad semiconductor retreat that briefly pushed a key ETF into bear market territory, while Apple overtook Nvidia to become the world's most valuable company on a major analyst upgrade.
Renewed anxieties about artificial intelligence spending sent technology stocks lower on Friday, extending a weeklong retreat for the semiconductor sector. The VanEck Semiconductor ETF briefly slipped into a bear market during the session, plunging 20% from its most recent high before bargain hunters intervened to recover a portion of the losses. The sharp contraction reflects forced liquidations and profit-taking rather than a fundamental breakdown in the AI narrative, according to Jeff Marks, a portfolio director at the CNBC Investing Club. To insulate against the drawdown and raise dry powder for future deployments, the fund recently reduced its position in Corning and completely exited its holding in Arm.
Amid the broader semiconductor weakness, Apple briefly eclipsed Nvidia to reclaim its position as the world's most valuable public company. The shift in market cap leadership was driven by an HSBC upgrade to "buy," with the bank aggressively lifting its price target to $366 from $260. HSBC cited Apple's revamped Apple Intelligence platform and upcoming device launches as the primary drivers for a major consumer upgrade cycle. Crucially, the bank noted that Apple can successfully monetize AI capabilities through its partnership with Alphabet, allowing it to sidestep the heavy capital expenditures currently squeezing hyperscalers.
The recent regulatory approval of Apple Intelligence on devices in China provides an additional and significant growth lever, expanding access to features designed to compel users to upgrade to newer iPhones. However, the upgrade call arrives late in the momentum cycle, with Apple shares having already staged a massive two-week run to a record high on Friday.
Looking ahead, Intel is set to report earnings next week, serving as a critical barometer for the industry's health. The chipmaker's shares have suffered a 30% decline this month as investors aggressively rotated out of semiconductor names. Despite the steep selloff, Jim Cramer reiterated that Intel remains his favorite stock, signaling an intent to "nibble" at current depressed valuations. Market participants will be closely scrutinizing the results for evidence of sustained strength in Intel's traditional CPU business, as well as tangible progress in its strategic pivot toward foundry operations.
