Stock Market Breaks Key Levels Amid AI Disruption Fears; Cisco, AppLovin, Arista, Vertiv In Focus: Weekly Review

• AI disruption fears widened beyond software to wealth management firms like Charles Schwab and Raymond James, commercial real estate companies like CBRE, and logistics firms like C.H. Robinson Worldwide, triggering sharp selloffs.
• Cisco Systems fell after warning of memory chip margin pressure despite beating estimates and reporting AI network infrastructure orders exceeding $2.1 billion, while Arista Networks surged on strong results and doubled AI networking revenue outlook to $3.25 billion.
• Semiconductor equipment makers remained strong with Applied Materials, Entegris, and Advanced Energy posting beat-and-raise reports, benefiting from heightened chipmaker spending on AI data center equipment.

Market Summary: Stock Market Breaks Key Levels Amid AI Disruption Fears

Market Performance

The Nasdaq retreated to three-month lows while the S&P 500 fell below its 50-day moving average as AI disruption fears intensified. The equal-weight S&P 500 rose slightly to highs, while the 10-year Treasury yield dropped sharply to three-month lows.

Economic Data

January jobs report showed employers added 130,000 jobs (double expectations), with the unemployment rate falling to 4.3%. Core CPI eased to 2.5%, the lowest since early 2021. However, retail sales weakened and existing-home sales approached record lows.

AI Disruption Impact

AI-driven sell-offs expanded beyond software to wealth management firms (Charles Schwab, Raymond James, JPMorgan), commercial real estate (CBRE), and logistics (C.H. Robinson) as investors fear new AI tools will undermine incumbents.

Key Earnings Winners

• Vertiv Holdings (+37% EPS, 23% revenue growth): $15B backlog, up 109% year-over-year
• Arista Networks (+24% EPS, 29% revenue growth to $2.49B): Raised 2026 revenue outlook from 20% to 25%; AI networking revenue expected to double to $3.25B
• Applied Materials, Howmet, and Curtiss-Wright: Strong performance driven by AI data center equipment and aerospace demand

Key Earnings Losers

• Cisco Systems: Plunged on profit margin pressure from surging memory chip prices despite Q2 revenue of $15.3B (+10%) and $2.1B in AI infrastructure orders
• AppLovin: Despite 88% EPS gain and 66% revenue growth to $1.66B, stock tumbled
• Coinbase: Reported surprise loss as revenue fell 22%
• Robinhood: Fell to eight-month low despite earnings beat, hurt by 38% decline in crypto revenue

Sector Highlights

Semiconductor equipment makers remained strong with