Tech Stocks Show Resilience Amid Mixed Earnings Reports and DeepSeek Concerns

The stock market experienced fluctuations this week, as AI hardware stocks took a hit following fears surrounding the potential impact of China’s DeepSeek AI model on data centers and power demands. However, the broader market displayed resilience with the S&P 500 and Nasdaq managing to recover some of their weekly losses, while the Dow Jones approached record highs.

AI Hardware Stocks React to DeepSeek

Monday saw a sharp decline in AI hardware stocks, particularly Nvidia (NVDA), amid growing concerns that DeepSeek, a Chinese AI model, could disrupt the need for data centers. As investors worried about its impact on power consumption and hardware demand, Nvidia’s stock struggled to sustain a bounce. However, many other AI hardware stocks bounced back later in the week, showcasing resilience despite Monday’s steep losses.

Tech Giants Shine Despite Mixed Results

Among tech giants, Apple (AAPL), IBM (IBM), and Meta Platforms (META) reported strong earnings, surpassing analysts’ expectations. Apple’s fiscal first-quarter earnings showed a 10% increase in EPS, though iPhone sales showed signs of stagnation. Meta’s earnings surged by 50%, but its revenue guidance for the coming months was conservative, which caused some volatility in its stock. Despite missing revenue targets, IBM delivered a strong performance, signaling positive growth in 2025, which helped boost its stock.

Tesla’s Bold Move into Robotaxis

Tesla (TSLA) caught investor attention as it erased early-week losses despite reporting weaker-than-expected results. CEO Elon Musk announced ambitious plans for robotaxis, suggesting that Tesla would launch unsupervised full self-driving technology in Texas by June, with robotaxi tests expected in multiple cities by year-end. Musk’s long-term vision for Tesla, with the introduction of Optimus robots, continues to capture attention, though short-term results remain under pressure.

Microsoft Struggles with Guidance

Microsoft (MSFT) reported a 10% increase in fiscal Q2 earnings, but the company’s guidance for the current quarter fell short of expectations. While the company’s Azure cloud infrastructure grew by 31%, it was slightly below analysts’ expectations, and the company cited currency headwinds for its cautious outlook. Microsoft’s AI business showed impressive growth, surpassing an annual revenue run rate of $13 billion, but capacity constraints raised some concerns.

Strong Earnings from Payment and Telecom Giants

Visa (V) and Mastercard (MA) saw their stocks rise as they reported solid earnings growth. Both payment giants exceeded analysts’ expectations, with Visa showing a 14% increase in adjusted EPS and Mastercard experiencing a 20% increase in earnings. In the telecom sector, AT&T (T) and T-Mobile US (TMUS) posted strong results, with AT&T adding 482,000 postpaid wireless customers and T-Mobile’s profit climbing 40%.

Mixed Results from the Oil Sector

Oil giants Exxon Mobil (XOM) and Chevron (CVX) reported significant earnings declines for Q4. Exxon saw a 33% decrease in earnings, despite increasing production, while Chevron’s earnings dropped by 40%. Despite these declines, both companies returned billions to shareholders. Oilfield services firm Baker Hughes (BKR), however, showed strong earnings growth, benefiting from its industrial and energy technology segments.

Defense Sector Faces Challenges

Lockheed Martin (LMT) and Raytheon Technologies (RTX) reported mixed earnings, with Lockheed Martin missing earnings expectations and offering weak guidance for 2025. Meanwhile, General Dynamics (GD) and Northrop Grumman (NOC) beat expectations, although Northrop Grumman’s revenue fell short.

Consumer Stocks Shine

Consumer stocks also performed well, with Brinker International (EAT) posting impressive gains driven by strong performance from its Chili’s brand. Meanwhile, Starbucks (SBUX) reported strong results as it looks to turn its business around in the U.S. despite some challenges.

Boeing Faces Setbacks but Signals Recovery

Boeing (BA) reported widened losses in Q4 due to the ongoing machinists’ strike, but the company signaled a potential recovery with higher jet production and delivery expectations for 2025.

Insurance Stocks Mixed

Insurance stocks showed mixed results, with Chubb (CB) experiencing a decline in Q4 earnings due to wildfires, while Progressive (PGR) posted solid earnings growth.

Overall, the market showed resilience with a strong performance from tech and payment stocks, while certain sectors like AI hardware, oil, and defense faced challenges. Treasury yields tumbled to their lowest levels for 2025, reflecting investor confidence despite mixed earnings reports.