TLDR
- TSMC posted record AI-driven earnings but its stock still fell as investor expectations were too high
- The AI chip selloff spread to Nvidia, AMD, Broadcom, ASML, Micron and Arm Holdings
- Netflix dropped after issuing weaker-than-expected guidance for the next quarter
- SpaceX shares slipped further below IPO price due to launch delays and lock-up expiry concerns
- Oil climbed above $81 a barrel, raising fresh inflation worries for markets
TSMC’s Record Quarter Wasn’t Enough
Taiwan Semiconductor Manufacturing reported record quarterly revenue and profit, driven by demand for AI chips from customers including Nvidia, Apple, AMD and Broadcom. The company also raised its capital spending outlook for 2027.
Despite the strong numbers, the stock fell. Investors have set the bar so high for AI companies that even record results are no longer enough to push prices up.
The AI Chip Selloff Spreads
The weakness in Taiwan Semiconductor Manufacturing quickly moved through the broader chip sector. Nvidia, AMD, Broadcom, ASML, Micron and Arm Holdings all traded lower on the day.
Analysts say the selloff is not about weakening AI demand. Most believe investors are taking profits after a massive run-up in valuations, while asking whether current prices already reflect future growth.
Cloud providers and tech giants are still spending billions on data centres and computing hardware. The question investors are now asking is whether this pullback is a healthy pause or the start of a longer slowdown.
Netflix Slides on Soft Guidance
Netflix posted results that met expectations but failed to impress. The bigger problem was guidance. Management flagged a softer outlook for the coming quarter, and also said it would cut back on certain user engagement disclosures.
Subscriber growth remained healthy and the ad-supported tier continued to grow. Investments in live sports and entertainment are also expanding. But none of that was enough to offset the cautious tone from management.
The drop in Netflix shares was another reminder that guidance matters as much as results during this earnings season.
SpaceX Keeps Falling After IPO
SpaceX shares extended their slide below the company’s IPO price. Delayed Starship launch timelines, upcoming insider lock-up expirations and broad weakness in growth stocks have all weighed on sentiment.
Analysts still view SpaceX as one of the most valuable aerospace companies in the world, backed by its satellite business and government contracts. But investors appear to be waiting for actual financial results before buying back in.
Oil Tops $81 and Markets Take Notice
Crude oil rose above $81 a barrel after renewed geopolitical tensions in the Middle East raised supply concerns. Higher energy costs put pressure on consumers and make it harder for central banks to control inflation.
The move comes just days after positive US inflation data had lifted market sentiment. If oil keeps climbing, investors may start rethinking Federal Reserve rate cut expectations heading into the second half of the year.
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