Investors will now turn their attention to next week’s reports from Microsoft, Alphabet, Amazon and Intel for fresh clues.

  • Meta raised the low end of its capital expenditure forecast for the year.
  • Western Digital and Lam Research beat earnings expectations, pointing to strong AI storage and chip-equipment demand.
  • Netflix shares slid on a weak profit outlook.

Tech heavyweights Netflix (NFLX), Meta Platforms (META) and Western Digital (WDC) delivered mixed results this week as the earnings season enters its most critical stretch. While revenue and profits have grown, investors are increasingly scrutinizing the mounting costs of expansion, data center investments and AI development.

Technology stocks fell sharply on Thursday; investors will now turn to next week’s reports from tech stalwarts Microsoft, Alphabet, Amazon and Intel for fresh clues.

Here’s a roundup of key stories from the past week:

Tech Selloff Deepens

Tech stocks suffered a sharp sell-off on Thursday amid renewed concerns about risks tied to the AI investment boom, mainly whether massive AI investments would generate sufficient returns.

The Nasdaq declined 2.6%, its steepest daily decline since June, while the S&P 500 dropped 1.2%. Meta tumbled 7%, Nvidia (NVDA) lost 4%, and SpaceX (SPCX) fell about 9%. Meta's higher capex floor, among other things, triggered the selloff.

Meta Posts Strong Q3 But AI Spending Plan Triggers Selloff

Meta reported better-than-expected Q3 revenue and issued strong guidance for the current quarter. However, another increase in its annual spending forecast and plans for a new share structure worried investors, sending the stock down 7% on Thursday.

Meta increased the lower end of its capex ​forecast range by $5 billion, to a range of $135 billion to $145 billion.

Western Digital, Lam Research Beat Expectations

Western Digital reported Q1 revenue and profit above expectations, forecast current-quarter revenue ahead of estimates, and raised its dividend, underscoring exceptionally robust storage demand.

CEO Irving Tan said demand is increasingly coming from customers outside its core base, including neoclouds and AI frontier labs. 

Lam Research (LRCX) also reported Q1 revenue and profit above expectations. However, WDC shares fell 6.4% the day after its report, while Lam Research shares also declined as investors rotated out of AI-linked stocks on Thursday.

Netflix, Super Micro Deliver Contrasting Signals

Netflix shares slid after its Q4 profit forecast fell short of Wall Street expectations and the company cut its full-year advertising forecast. Third-quarter revenue rose nearly 12%, in line with Wall Street targets, but at the slowest rate of increase in nearly three years. 

Meanwhile, Super Micro Computer (SMCI) surged after projecting fiscal Q1 revenue above estimates, signaling resilient demand for AI servers.

US Bans DeepSeek From Certain Government Systems

Earlier this week, the U.S. Department of Homeland Security ordered civilian federal agencies to remove DeepSeek AI products from their IT systems, citing potential data transfers to China and national security risks.

The department is also banning the acquisition of DeepSeek products and third-party services developed using DeepSeek by US civilian government agencies.

How Did Tech Stocks Move?

Adobe (ADBE) and Intuit (INTU) were among the top tech gainers in the Nasdaq-100 in the week through Thursday, both rising about 7.5%.

The Invesco QQQ Trust Series 1 (QQQ) fell 0.8% and is heading for its second straight week in the red. CoreWeave (CRWV) dropped over 20%, emerging as the biggest loser in the week.

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