Late-night plunge across the board! US tech stocks suddenly hit with negative news!

U.S. Tech Stocks Suddenly Face Heavy Selling

Last night, the U.S. stock market saw a broad decline in tech stocks, with the Nasdaq dropping over 2% intraday, chip stocks falling collectively, and the Philadelphia Semiconductor Index plunging over 6%. AI computing chip company AMD tumbled more than 17%, while the “Big Four” storage giants all declined sharply—SanDisk down over 15%, Micron Technology down over 9%. Additionally, AI application stocks AppLovin and Palantir both fell more than 10%.

Analysts pointed out that AMD’s lower-than-expected guidance for its earnings report was the “trigger” for the sharp decline in chip stocks. Furthermore, the ongoing sell-off in the software sector has intensified market concerns. In response, NVIDIA CEO Jensen Huang publicly stated: “It’s hard to understand. Software products are tools; AI will use these tools, not reinvent them.”

After the market close, Alphabet, Google’s parent company, released its earnings report showing that capital expenditures in 2026 will reach an astonishing $175 billion to $185 billion, far exceeding market expectations. Following the earnings release, its stock experienced significant after-hours volatility, falling over 1% as of press time.

Tech Stocks Plunge Across the Board

On February 4, Eastern Time, after the opening of the U.S. markets, the three major indices diverged noticeably. Funds quickly withdrew from the previously strong tech sector. The Nasdaq’s decline widened to 2.45%, the chip index fell over 6%, while the Dow Jones Industrial Average moved higher. By the close, the Nasdaq was down 1.51%, the S&P 500 fell 0.51%, and the Dow rose 0.53%.

Most large-cap tech stocks declined, with NVIDIA, Meta, Tesla, and Broadcom dropping over 3%. Amazon and TSMC ADRs fell more than 2%, and Google-A declined nearly 2%. Apple, on the other hand, rose over 2%, and Microsoft increased by 0.72%.

Chip stocks all declined sharply, with the Philadelphia Semiconductor Index dropping 4.36%. AMD plunged 17.3%, marking the largest closing decline since May 2017, erasing all stock gains since 2026. Applied Materials fell over 6%, ASML dropped over 4%, and Mavenir Technologies declined over 2%.

In terms of news, AMD’s guidance for Q1 2026 did not meet analysts’ high expectations, raising doubts among investors about AMD’s ability to compete with NVIDIA in the AI chip market.

AMD’s midpoint revenue guidance for Q1 2026 is approximately $9.8 billion, higher than the consensus estimate but below some optimistic forecasts exceeding $10 billion.

This sharp decline also reflects a more cautious attitude among investors when re-evaluating AI sector valuations. In such high-valuation environments, any underperformance can trigger significant stock price adjustments.

Additionally, U.S. storage chip stocks experienced even larger declines—SanDisk down over 16%, Micron Technology down over 9%, Western Digital down over 7%, and Seagate Technology down over 5%.

Analysts suggest that there are no obvious negative news for the U.S. storage chip industry. The main reason for this round of sell-offs may be the overall risk appetite weakening, with related stocks previously overextended and valuations pushed to extremes, ultimately leading to profit-taking and short-term capital withdrawals.

Regarding this tech sell-off, especially the sharp decline in the software sector, NVIDIA CEO Jensen Huang publicly stated: “It’s hard to understand.” He mentioned at an event this week that software products are tools; AI will use these tools, not reinvent them.

Google’s Earnings Report Released

After hours, Alphabet, Google’s parent company, announced its latest earnings report showing that in Q4 2025, both revenue and profit exceeded market expectations. Capital expenditures in 2026 will reach $175 billion to $185 billion, nearly double that of 2025.

Following the earnings release, Google’s stock initially plunged more than 7% in after-hours trading, then quickly rebounded and turned positive, rising over 4% at one point before falling back again. As of 06:45 Beijing time, it was down 2.28%.

Specifically, Alphabet’s Q4 2025 revenue increased 18% year-over-year to $113.8 billion. Excluding traffic acquisition costs (TAC), quarterly revenue grew 19% to $97.2 billion, beating the expected $95.2 billion. Operating profit was $35.93 billion, up 16% year-over-year. EPS was $2.82, up 31%, slightly below Q3’s approximately $3.5 but still significantly above market expectations.

Google Cloud performed particularly well, with revenue soaring 48% year-over-year to $17.7 billion, surpassing analyst estimates of $16.2 billion and accelerating from the 34% growth in Q3 last year.

Cloud operating profit in Q4 reached $5.3 billion, 2.5 times the $2.1 billion profit from a year earlier, far exceeding the $3.7 billion forecast by analysts. This growth was mainly driven by strong demand from enterprise clients for AI infrastructure and AI solutions.

What shocked Wall Street even more was Alphabet’s capital expenditure data. The report showed that in Q4 2025, capital expenditures reached $27.9 billion, nearly doubling year-over-year but slightly below the market expectation of $28.2 billion. For the full year 2025, capital expenditures totaled $92 billion, with nearly 30% spent in the fourth quarter.

Meanwhile, Alphabet’s guidance for 2026 expenditures exceeded expectations significantly. The company announced that capital expenditures in 2026 are expected to be between $175 billion and $185 billion, with a median of $180 billion—almost double that of 2025 and $60 billion higher than the market’s forecast of $119.5 billion, representing an increase of nearly 51%.

Alphabet CEO Sundar Pichai explained in the earnings report: “We see AI investments and infrastructure driving revenue and growth across all our business lines. To meet customer needs and seize the growing opportunities ahead, we expect capital expenditures in 2026 to be between $175 billion and $185 billion.”