New York, Feb 12, 2026, 17:32 EST
Thursday saw a hard selloff in U.S. equities, led by steep declines in tech and transport names as traders fretted over AI’s potential impact on corporate margins. The Nasdaq Composite tumbled 2.03%. S&P 500 lost 1.57%. Dow shed 1.34%. The Dow Jones Transport Average plummeted 4%. Cisco plunged 12.3%, AppLovin cratered 19.7%. Rotation went into utilities and consumer staples. “We see this as a ‘prove it’ year for AI. We need to start seeing some return on investments,” said Jack Herr at GuideStone Funds. (Reuters)
It’s been rough for software stocks—even those posting stronger-than-expected numbers. Investors, spooked by the threat that AI could shake up established business models, have been quick to dump shares. AppLovin CEO Adam Foroughi tried to tamp down those fears on the earnings call, pointing out the company’s healthy metrics. “The timing of AI disruption remains indeterminate, and the fog of uncertainty is unlikely to dissipate quickly,” UBS strategists led by Matthew Mish wrote. (AP News)
Asset prices took a hit as tech earnings rattled nerves and soft commodities dragged markets lower. Nasdaq 100 dropped 2%, S&P 500 slipped 1.6%, according to Bloomberg. Precious metals weren’t spared—gold and silver both slumped, bitcoin stayed underwater, and cash rotated into Treasuries. That software ETF? It shed 2.7%. (Bloomberg)
Cisco pointed to surging AI infrastructure outlays from OpenAI, Alphabet, and Microsoft as the force behind tighter memory chip supplies and higher prices. Adjusted gross margin landed at 67.5% for the quarter—somewhat short of the 68.14% analysts were looking for. CEO Chuck Robbins said Cisco is pushing through price hikes and changing contract terms, and now sees “AI orders in excess of $5 billion” for fiscal 2026. (Reuters)
There was more to digest on the economic front: initial jobless claims dropped by 5,000 to 227,000 for the week ending Feb. 7, coming in higher than the 222,000 economists had projected. Continuing claims, seen as a gauge for hiring, climbed to 1.862 million. “The labor market has stabilized and will improve over 2026,” said Nancy Vanden Houten, lead U.S. economist at Oxford Economics. Existing home sales slumped 8.4% in January, landing at an annualized 3.91 million. The Fed, for its part, kept its policy rate steady between 3.50% and 3.75% last month. (Reuters)
Equinix broke the trend, with a 2026 revenue projection between $10.12 billion and $10.22 billion—clear of the $10.07 billion analysts were looking for. CEO Adaire Fox-Martin pointed to the company’s position linking “distributed AI, cloud and networking infrastructure” as a key advantage for the long run. Fresh data center investments are coming, too, with Chennai and Jakarta among the new sites. (Reuters)
Applied Materials is eyeing second-quarter sales of roughly $7.65 billion, give or take $500 million—easily topping consensus forecasts of $7.01 billion. The company credited a worldwide memory crunch for the stronger demand. CEO Gary Dickerson pointed to “the acceleration of industry investments in AI computing” as a key driver, and the stock jumped more than 9% in late trading. That update also gave a lift to Lam Research and KLA. Applied, meanwhile, singled out rising orders for high-bandwidth memory—HBM chips designed to pair with AI processors. (Reuters)
Lenovo CEO Yang Yuanqing flagged fresh headaches from a deepening memory-chip crunch, with PC shipments now under tighter strain—even as the company is hiking prices and leaning deeper into AI inference, a strategy focused on running trained models to generate answers or forecasts. “We expect PC unit sales to face pressure,” Yang said. The numbers: revenue for the quarter climbed 18% to $22.2 billion, but net profit dropped 21% to $546 million, hit by a $285 million restructuring charge. Yang said the restructuring, aimed at trimming as much as $200 million in costs over three years and sharpening Lenovo’s AI inference focus, is underway. (Reuters)
Investors now look to Friday’s U.S. consumer inflation data, set for release at 8:30 a.m. EST. Projections point to headline CPI climbing 2.5% from a year earlier, compared with December’s 2.7%. If the number comes in lower, that might give long-duration tech names some breathing room. But another hot reading — or more margin warnings — could leave market players cautious. (Morningstar)
Right now, AI isn’t just a straightforward stock market bull story anymore. Traders are scrambling to weigh its broader fallout as it happens, zeroing in on “potential losers”—and the pain is showing up fastest in the trades with the heaviest traffic.
