U.S. equity indexes were positioned to close the week higher, supported by a temporary easing of Middle East tensions - including a three-week extension of the Israel-Lebanon ceasefire and reports that Irans foreign minister traveled to Pakistan for talks - which helped dampen some geopolitical anxiety.
However, the broad market advance was not uninterrupted. On Thursday a retreat in prices, driven in part by a software-led selloff and a renewed rise in oil, highlighted how sentiment remains vulnerable to both macro and sector-specific developments.
Major themes this week
- Macro relief from a short-term reduction in geopolitical risk coincided with company-specific earnings reactions.
- Semiconductor names posted notable gains on better-than-expected results and positive guidance in data center and AI-related demand.
- Conversely, several large software and cloud-exposed businesses triggered sectorwide weakness after their quarterly reports signaled revenue headwinds or decelerating growth.
Intel
Intel shares climbed sharply on Friday, trading roughly 21.9% higher as of 12:38 pm ET following quarterly results that exceeded consensus expectations. Management pointed to rapid growth in its data center and artificial intelligence business as a key contributor to the outperformance.
The company reported first-quarter revenue of $13.6 billion, up from $12.7 billion in the same period a year earlier, and above analysts estimates of $12.41 billion. The stronger-than-expected quarter and an encouraging outlook prompted Roth/MKM to lift its rating on Intel to Buy from Neutral.
Roth/MKM analyst Suji Desilva said: "We are impressed with the improved execution under CEO Lip Bu Tan, who has driven changes at INTC to better participate in the rapid AI Infrastructure growth. He has rapidly improved manufacturing efficiency and CPU products, to take advantage of the tailwinds of agentic AI."
The firm added: "INTC reported stronger than expected 1Q26 results and guided to growth off these levels. Data center demand drove the upside from advanced AI builds that require higher CPU count."
Texas Instruments
Texas Instruments also saw a meaningful rally after its quarterly results. The stock rose 19.4% in Thursdays session and finished the week up about 21.8% versus the prior week, after delivering results above consensus.
Wolfe Research commented that TXN is "among our favorite analog ideas" following the report, and the firm kept an Outperform rating while raising its price target to $315 from $260.
ServiceNow
ServiceNow shares plunged nearly 18% on Thursday and were down more than 11% for the week after its quarterly performance raised investor concerns. While the company slightly beat Wall Streets estimates, it said the conflict in the Middle East created a "headwind" for quarterly subscription revenue.
The disappointing tone from ServiceNow contributed to weakness across the software sector on Thursday. Analysts at Truist cautioned that the sector may face tougher scrutiny going forward, noting: "With heightened scrutiny on software vendors as frontier labs ramp enterprise revenue, the penalty for missteps becomes more severe."
IBM
IBMs quarterly report also pressured software-related stocks. Although IBM beat consensus expectations for both revenue and earnings, the company maintained its full-year guidance while reporting a deceleration in top-line growth. Softness in the software segment, and specifically the Red Hat cloud business, weighed on the results.
Shares of IBM fell 8.3% on Thursday and were down more than 10% over the past week.
Meta Platforms
Meta shares declined through most of the week before rising roughly 2.4% on Friday. Earlier in the week the company announced plans to cut about 10% of its workforce - approximately 8,000 employees - as part of an efficiency effort, with layoffs reportedly set to take effect on May 20.
In response to the developments, Oppenheimer analyst Jason Helfstein reiterated a Perform rating on Meta and said: "We remain cautious on META shares ahead of 1Q results. Despite a robust revenue outlook, higher compute costs will limit earnings upside, even with headcount reductions."
He added: "We believe investors already expecting FY revenue approaching 30% on AI/LLM driven conversion improvements, suggesting any comments about tough 2H comps (2H25 +25% y/y) would be received poorly."
Market takeaways
The week highlighted a contrast between semiconductor names benefiting from AI and data center demand and software/cloud companies facing increased investor scrutiny after incremental revenue or guidance weaknesses. Geopolitical developments temporarily eased some risk premia, but the market reaction to corporate results and a move higher in oil underlined how quickly sentiment can shift.
Note on valuation tools - For investors assessing whether Intel shares represent value, proprietary fair-value tools and multi-model approaches can be used to compare market price against a range of valuation outputs. Such tools incorporate multiple industry valuation methods to provide a range of potential fair values, but readers should evaluate these outputs in the context of company-specific results and guidance.