Morning Call 5th February 2026 – Heavy rotation out of tech stocks continues as Tech Bears emerge
Investor enthusiasm for as excitement around artificial intelligence cooled, dragging down major tech names and sparking fresh doubts about whether Wall Street’s AI rally has peaked.
WATCH ON YOUTUBE MPC Morning Call 5th February 2026 – Heavy rotation out of tech stocks continues as Tech Bears emerge Investor enthusiasm for as excitement around artificial intelligence cooled, dragging down major tech names and sparking fresh doubts about whether Wall Street’s AI rally has peaked. Losses were led by Advanced Micro Devices, which plunged 17% after a disappointing revenue forecast raised concerns about its ability to compete with AI giant Nvidia, which itself dropped 3.4%. Palantir also tumbled nearly 12% after surging the previous day, while software names like Snowflake and Datadog extended declines amid worries that AI could disrupt established players. Alphabet slipped almost 2% before earnings, then recovered after hours as it announced expanded AI investments. Despite the selloff, a few standouts like Super Micro Computer and Eli Lilly rallied on strong outlooks, the latter boosted by surging demand for weight-loss drugs. Beyond corporate results, investors digested weaker-than-expected U.S. employment data. ADP reported private payrolls rose by just 22,000 in January, far below forecasts, reflecting softness in professional and manufacturing jobs. The government’s main jobs report was delayed due to a brief shutdown, leaving markets reliant on these figures for labour market insight. Meanwhile, the services sector held steady with expansion continuing for the month, easing fears of an imminent slowdown. On the geopolitical front, traders also absorbed news of a diplomatic call between President Trump and China’s Xi Jinping covering trade, Taiwan, and energy purchases. Trump described relations as “extremely good” and confirmed plans to visit China in April. Commodities reacted to global tensions — gold gave back recent gains after nearing $5,100 an ounce, while oil prices jumped nearly 2% after reports of cancelled and then reinstated U.S.-Iran nuclear talks. As markets recalibrate from the AI frenzy to broader macroeconomic and geopolitical risks, volatility appears poised to stay elevated. Earnings Alphabet (GOOGL) fell 1% Alphabet announced plans to boost its capital spending to between $175 billion and $185 billion this year—far above analysts’ $115 billion expectation—as it deepens investments to stay ahead in the AI race. Despite a 48% surge in Google Cloud revenue to $17.7 billion, shares fell over 6% in extended trading amid investor concerns about soaring AI costs. Alongside rivals Amazon, Microsoft, and Meta, which together are set to spend over $500 billion on AI infrastructure this year, Google is rapidly expanding capacity to meet demand. Its AI push appears to be paying off, with the Gemini AI app surpassing 650 million monthly users, AI-powered search used by 2 billion people, and a new deal to integrate Gemini into Apple’s Siri ecosystem. Broadcom (AVGO), NVIDIA (NVDA) and other chip stocks rose following the huge CapEx figure. Snap (SNAP) rose 7% after it reported results that were about in-line with consensus. Fourth quarter revenue increased 10% year-over-year to $1,716 million Qualcomm (QCOM) fell 9% after publishing disappointing guidance. Qualcomm CEO Cristiano Amon said that the entire forecast miss was due to a memory chip shortage hitting smartphone customers Arm Holdings (ARM) fell 7% despite results that matched estimates for the quarter. Symbotic (SYM) rose 9% after it said it sees Q2 2026 revenue of $650-670 million, versus the consensus of $638 million. Government Bond Yields Commodities, Energy & FX
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