ServiceNow jumps 7% on Q2 beat as ARM and Intel tumble; chip equipment selloff sends SOXX down 4.4%

ServiceNow's second-quarter earnings beat drove enterprise software stocks sharply higher on Thursday, while chip-equipment names cratered alongside a fresh sell-off in Arm Holdings, sending the iShares PHLX Semiconductor ETF down 4.4% for one of its worst single sessions in months. The S&P 500 closed nearly flat at 7,412, while the Nasdaq Composite fell 0.6%, masking a stark bifurcation between software names advancing on earnings catalysts and semiconductors retreating on valuation and capital-spending concerns.

Today's biggest movers

ServiceNow jumps 7% on a decisive second-quarter earnings beat

ServiceNow Inc. (NYSE: NOW) surged 7.4% to $98.78 after reporting Q2 earnings per share of $0.90, beating the analyst consensus of $0.76 by 18%, according to data compiled by TipRanks. Revenue for the quarter came in at approximately $4.0 billion, and management raised its full-year subscription revenue forecast to between $15.735 billion and $15.775 billion. The guidance lift reinforced the view that AI-driven workflow automation is translating into durable enterprise spending despite a tightening macro environment.

The quarter arrived as a meaningful relief after ServiceNow shares had declined more than 50% from their 52-week high ahead of the print, reflecting sector-wide concern about software valuations and margin compression from AI investment. Analysts at Simply Wall St. had flagged margin pressure as a leading risk into the quarter; the result suggested those concerns are, for now, better-than-feared. NOW has declined 33% year-to-date, leaving substantial ground to recover if subscription momentum continues into the second half.

Analyst targets are still being reset. DA Davidson, carrying a Buy rating, lowered its target to $170, while Cantor Fitzgerald raised its target to $141 with an Overweight rating. The spread underscores that while the earnings beat is unambiguous, consensus on fair value after a sharp sector re-rating remains wide open. Thursday's print provides the first concrete evidence that the reset may have gone far enough.

Intel falls 8% despite the fastest revenue growth in 15 years

The session's sharpest paradox was Intel Corp. (NASDAQ: INTC), which shed 7.9% to $92.32 a day after posting its most robust quarterly result in over a decade. Q2 2026 revenue came in at $16.1 billion, up 25.4% year-over-year and well ahead of the Wall Street consensus of $14.44 billion, per Bloomberg. Non-GAAP earnings of $0.42 per share were nearly double the $0.22 estimate. The data center segment drove the outperformance, with revenue of $6.3 billion, up 59% year-over-year, as Intel gains traction in the ongoing agentic-computing infrastructure cycle.

Investors sold the news on a single concern: management flagged a "meaningful increase" in capital expenditure for next year as Intel aggressively builds out its contract-manufacturing operation. Capex anxiety has been a recurring theme this earnings season; as covered in the July 23 recap, Alphabet and Tesla both saw sharp post-earnings selloffs partly tied to elevated spending commitments. With a Hold consensus across 22 of 34 analyst ratings per Benzinga, there is limited institutional appetite to step in front of an open-ended capex cycle.

Third-quarter guidance was above expectations as well: Intel projects adjusted EPS of $0.38 on revenue of $15.8 billion to $16.8 billion, against estimates of $0.27 on $15.1 billion. That sustained momentum picture, paired with the post-earnings selloff, echoes the pattern noted in the July 21 session, when Intel and AMD ran sharply ahead of results and then corrected on the announcement itself. Shares remain up 134% year-to-date.

ARM slips 8% as investors reposition ahead of July 29 results

Arm Holdings plc (NASDAQ: ARM) fell 8.1% to $260.01, the largest single-day decline among all 25 names tracked in this series. No company-specific catalyst was reported; the move appears to reflect pre-earnings repositioning ahead of ARM's fiscal first-quarter results, due July 29. Analysts surveyed by stockanalysis.com project consensus EPS of $0.41 on revenue of $1.27 billion, with the stock pricing in demanding AI-growth expectations after a 126.6% year-to-date advance.

Analyst views on valuation are diverging sharply. Wells Fargo lowered its price target to $350 from $410, citing the stock's rich multiple relative to near-term earnings visibility. Susquehanna, by contrast, raised its target to $320 from $300, pointing to agentic AI tailwinds and ARM's expanding role in server CPU architecture. A broader fair-value estimate from GuruFocus sits at $416.94, revised upward from $345.25 following fresh assumptions for adjusted revenue growth, profit margins, and future price-to-earnings multiples in the context of AI infrastructure adoption.

With the print less than a week away, Thursday's selloff reads primarily as valuation caution rather than fundamental concern. ARM's intraday range of $30.56 (from $258.43 to $288.99) was the widest in the AI-stock universe on the day, reflecting elevated options-market implied volatility heading into the earnings announcement.

Salesforce rebounds 4% despite fresh analyst downgrades

Salesforce Inc. (NYSE: CRM) added 4.3% to $163.66, cutting against the grain of two high-profile analyst actions on the day. Morgan Stanley downgraded CRM to Equal Weight from Overweight and cut its price target to $185 from $287, citing enterprise software spending cycle concerns. KeyBanc analyst Jackson Ader separately downgraded the stock to Hold from Buy, per Benzinga. Despite those headwinds, shares moved higher, suggesting short-covering and pre-earnings positioning ahead of the company's September 2 results.

Fundamentally, Salesforce's fiscal 2026 revenue reached $41.53 billion, a 9.6% increase over the prior year. The 53-analyst consensus carries a Buy rating with an average 12-month price target of $241.72, per stockanalysis.com, implying more than 47% upside from Thursday's close. The resilience in CRM and NOW mirrors the broader theme flagged in the July 22 session, where enterprise software names began showing signs of rotation ahead of this earnings wave, even as hardware names dominated headlines.

Chip equipment stocks extend their month-long rout

Applied Materials Inc. (NASDAQ: AMAT) and Lam Research Corp. (NASDAQ: LRCX) each fell more than 4%, with AMAT closing at $536.25 (-4.7%) and LRCX at $305.21 (-4.6%). Both names have lost 20-24% over the past month as investors weigh whether AI infrastructure spending is peaking or redistributing away from wafer-processing equipment. SOXX's 4.4% single-day loss brings its one-month decline to 15.7%.

The fundamental backdrop remains constructive, even if price action suggests otherwise. Bernstein assigned a Buy on AMAT on July 13 and Stifel raised its target to $650 from $530 on July 9. Applied Materials is scheduled to report fiscal third-quarter results on August 13; S&P Global consensus projects a 35.5% year-over-year increase in adjusted EPS. For Lam Research, Morgan Stanley lifted its target to $404 from $331 on July 6; TD Cowen and Evercore ISI sit at $400 and $355, respectively. The investment thesis across both names rests on HBM memory scaling and gate-all-around node transitions requiring more deposition and etch steps, sustaining equipment demand well into 2027. Thursday's session tested that conviction at depth.

Notable but quieter

Advanced Micro Devices Inc. (NASDAQ: AMD) gave back 3.3% to $521.95, consolidating after a 133.6% year-to-date gain. Goldman Sachs raised its AMD target to $640 and Wells Fargo to $615 earlier this month, both citing EPYC server CPU share gains. AMD reports Q2 results on August 4; Wall Street expects revenue of $10.25 billion, up 38% year-over-year, driven by a data center segment that grew 57% in the prior quarter. Oracle Corp. (NYSE: ORCL) fell 4.2% to $114.99, deepening a year-to-date loss of 41.2%. CLSA initiated coverage at Hold with a $145 target on July 20; Mizuho holds a Buy at $320. Alphabet Inc. (NASDAQ: GOOGL) edged up 0.7% to $319.74, a modest recovery after Wednesday's post-earnings pressure. Tesla Inc. (NASDAQ: TSLA) shed a further 2.1% to $313.03, extending the sell-off triggered by its Q2 results earlier in the week.

What to watch next week

Arm Holdings reports fiscal Q1 results on July 29, the most closely watched near-term catalyst for the semiconductor complex given the stock's steep year-to-date run and Thursday's sharp pre-earnings pullback. Advanced Micro Devices follows on August 4 and Applied Materials on August 13. Microsoft Corp. (NASDAQ: MSFT) and Amazon.com Inc. (NASDAQ: AMZN) are also expected to report within the next two weeks, and both carry outsized weight as AI-infrastructure bellwethers whose capex guidance will set the tone for the sector into Q3. On the macro front, investors will be monitoring Federal Reserve commentary after crude oil dipped below $100 per barrel on Friday morning, per Bloomberg, a move that affects inflation expectations and the rate outlook for technology-sector multiples.

Not investment advice.