New York, Feb 14, 2026, 12:09 PM EST — The market is closed.
Applied Materials surprised with a bullish forecast, offering a rare win for U.S. semiconductor names after a turbulent stretch. The chip equipment giant projected second-quarter revenue near $7.65 billion, give or take $500 million, and adjusted earnings of $2.64 a share, plus or minus 20 cents—both clearing Wall Street’s bar. The stock at one point soared more than 10% Friday. Competitors Lam Research and KLA moved higher as well. At least 22 analysts lifted price targets on Applied after the numbers came through. CEO Gary Dickerson credited “the acceleration of industry investments in AI computing” for the jump. Morningstar’s William Kerwin described the moment as “a massive wafer fabrication equipment growth cycle,” pointing to tight supply for high-bandwidth memory chips feeding AI processors. Reuters
Action stayed jittery across the board. The Nasdaq dropped 0.22% Friday, while the S&P 500 inched up just 0.05%. U.S. consumer prices for January came in softer than forecasts, prompting traders to nudge up odds for a June rate cut. “Large cap tech stocks continue to be an anchor on the market and any whiff of optimism continues to get rejected,” said Michael James, managing director at Rosenblatt Securities. As the Presidents Day break approached, all three major indexes notched their steepest weekly declines since November. Reuters
The Philadelphia SE Semiconductor index (.SOX) climbed 0.66% Friday, closing at 8,137.86, MarketWatch data showed. That move followed a sharp 2.5% slide the previous session. “We see this as a ‘prove it’ year for AI. We need to start seeing some return on investments,” said Jack Herr, primary investment analyst at GuideStone Funds, after a sweeping tech selloff sent investors in search of defensive names. MarketWatch
Not every chip giant moved up Friday—Nvidia slipped 2.21% to $182.81, and Broadcom was down 1.81% at $325.17, according to MarketWatch data. Texas Instruments, along with several other analog names, managed to close higher.
Those swings highlight a bigger story: investors see AI as both a catalyst and a risk. Garrett Melson, portfolio strategist at Natixis Investment Managers Solutions, described what he called a “breakdown” in the formerly unified AI trade—stocks now reshuffled depending on who’s emerging as a winner or who’s at risk. That back-and-forth, he said, tends to fuel volatility, particularly among the biggest names in the index. Reuters
Trade policy is adding fresh uncertainty for chip investors. Sources tell Reuters the Trump administration has paused several tech-security efforts targeting China, with an April summit between U.S. President Donald Trump and China’s Xi Jinping on the horizon. Among the stalled moves: proposed curbs on Chinese gear in U.S. data centers. That decision has drawn fire from China hawks, who argue it may put U.S. technology at risk.
Still, there’s little cushion behind the excitement over AI-related equipment demand. Should hyperscalers pause or pull back on data-center expansion, or if memory shortages suddenly give way to excess inventory, fresh orders could dry up fast—and market leadership could turn on a dime. Chip names also face whiplash from abrupt policy changes, whether it’s new export restrictions or sanctions, which can slam sales with little notice.
Plenty is stacked up for next week. Wednesday features the Federal Reserve’s meeting minutes, then on Friday, investors will watch for the Fed’s favored PCE inflation data, a first look at U.S. fourth-quarter GDP, and flash PMI reports tracking business sentiment, according to S&P Global Market Intelligence.
U.S. equities sit idle Monday as Presidents Day shutters the markets, according to Nasdaq’s posted schedule. That bumps the next standard session to Tuesday. Day traders in the chip sector once again point to the stretched-out weekend as a source of thin liquidity.
The semiconductor crowd is eyeing Nvidia’s fourth-quarter results call, slated for Feb. 25. Following this week’s turbulence, chip traders are locking onto that date.
