Nasdaq 100 swings 3% as Apple drops 5%, dragging tech lower

The Nasdaq 100 reversed from a 2.1% gain to a 1% loss on Thursday as Apple Inc. dropped 5.1%, dragging the broader technology sector into negative territory. The index initially surged after Micron Technology Inc.'s earnings beat, then gave up all gains as selling pressure intensified across megacap tech names.

Nvidia Corp. Chief Executive Officer Jensen Huang said at the company's shareholder meeting that "useful AI has arrived and is already profitable," addressing market skepticism about AI capital expenditure returns. Nvidia shares fell 2.9% during the session, while Qualcomm Inc. declined 3% as the chipmaker pushes into AI data centers with a $15 billion revenue target by 2029.

The selloff was broad within technology. Strategy shares dropped 7.1%, Applovin Corp. fell 6.3% and Rocket Lab USA Inc. lost 6%. Arm Holdings Plc, Marvell Technology Inc. and Nvidia each declined at least 2.9%. On the upside, Micron Technology pared its initial 20% surge to trade up 8.6% after reporting third-quarter revenue of $41.46 billion and adjusted earnings per share of $25.11, both beating consensus estimates. The company said customers have committed $22 billion to secure future memory chip supplies, with remaining performance obligations of approximately $100 billion. Western Digital Corp. rose 3.6% and SanDisk Corp. gained 10.6%.

Tech Breadth Worsens as Small-Cap Names Get Crushed

Beyond megacap tech, the damage was more severe in smaller names. Digital Currency Group plunged 40%, Nano-X Imaging Ltd. dropped 34.7% and Codere Online Luxembourg Corp. fell at least 34.7%. Triller Group Corp. bucked the trend, surging more than 412%. The dispersion between winners and losers highlighted the selective nature of the selloff, with investors rotating out of richly valued names while chasing specific catalysts.

Cerebras Systems Inc., the AI chip startup, slumped 19.6% after its full-year gross margin guidance came in at 38% to 41%, well below the 47% level in the first quarter and far below the gross margins of established chipmakers like Nvidia and Advanced Micro Devices Inc. The guidance renewed concerns about the quality of earnings among AI chip companies.

Oil and Gold Slide as Dollar Firms

The equity selloff unfolded alongside declines in commodity markets. Brent crude fell 4.7% to $73.37 a barrel and West Texas Intermediate dropped 4.35% to $69.86, as concerns over supply disruptions through the Strait of Hormuz eased. Gold briefly dipped below $4,000 as the U.S. dollar strengthened. The S&P 500 expanded its decline to 0.34%, with technology and telecommunications sectors both down more than 1.3%.

The reversal signals that investors are reassessing tech valuations even as AI-driven demand remains strong. Apple's 5.1% decline as the index's most heavily weighted component will continue to pressure the Nasdaq, while the halving of Micron's gains suggests profit-taking across the semiconductor space. Traders are now watching the upcoming U.S. PCE price index release for further clues on the Federal Reserve's rate path, with CME FedWatch data showing increased bets on a second rate hike this year.

This article is for informational purposes only and does not constitute investment advice.