Tech and AI Market Today: Chip Rebound Meets a Critical Earnings Test
Technology shares rebounded Monday, with the Nasdaq 100 gaining approximately 1%–1.3% by midday and breaking a three-session losing streak. Semiconductors led the recovery: the Philadelphia Semiconductor Index rose roughly 3.1% after falling into bear-market territory last week. The bounce follows a notable shift in positioning, including a $5.67 billion Friday outflow from the Invesco QQQ—the fund’s largest single-day withdrawal in at least a year.
Nvidia gained approximately 1.4%, helping lead the semiconductor recovery, while Alphabet climbed about 3.3% following a report that Google is developing a new chip intended to strengthen its AI-inference capabilities. Amazon added roughly 1%, but Apple fell between 2.1% and 2.6%, making it a notable large-cap laggard.
Investor conviction around chips remains unusually divided. Semiconductor ETFs have attracted a record $46 billion of inflows this year even as the sector experiences its worst monthly performance since 2008. Hedge funds, meanwhile, have reduced U.S. technology exposure at the fastest cumulative pace recorded by Goldman Sachs Prime Services in more than a decade.
Competition from China is adding pressure. Moonshot AI’s release of Kimi K3, a 2.8 trillion-parameter open-weight model, intensified concerns that Chinese developers are closing the gap with leading U.S. AI companies faster than expected.[9] Alibaba also previewed Qwen3.8 Max, which it characterized as competitive with leading frontier models. Bloomberg’s AI demand gauge is consequently flashing amber as risk appetite weakens across several AI-linked markets.
This week’s earnings from Alphabet and Intel will provide an important test of the AI investment thesis. Investors will be watching whether enormous infrastructure expenditures are producing measurable revenue—or merely diverting corporate budgets from conventional software and IT services. JPMorgan favors hyperscalers heading into earnings, arguing that supportive capital-spending guidance and credible evidence of AI monetization could provide meaningful upside. The stakes are rising: AI-related costs now appear on 65% of this season’s earnings calls, according to Bloomberg analysis.
Beyond public-market trading, the AI infrastructure buildout continues. SpaceX is reportedly discussing leasing computing capacity to the Pentagon, while Aon expanded its data-center insurance program to $5 billion. Retail investors are also looking beyond the traditional Magnificent Seven toward infrastructure beneficiaries such as Equinix and Marvell Technology.
The bottom line: Monday’s advance is primarily a semiconductor rebound after an aggressive selloff. Whether it becomes a durable recovery will depend on earnings guidance, evidence of AI monetization and the industry’s response to accelerating international competition.
Market performance and price movements are based on data as of 12:29 p.m. EDT and may change before the close. This article is for informational purposes and does not constitute investment advice.