ARM and Applied Materials rally against Fed headwinds while ServiceNow and Meta sink, SOXX +1.4%

Semiconductor stocks staged a sharp reversal on Tuesday as ARM Holdings PLC (NASDAQ: ARM) surged 5.69% and Applied Materials Inc. (NASDAQ: AMAT) climbed 4.35%, even as the S&P 500 shed 1.21% and the Nasdaq Composite fell 1.34% on hawkish signals from Federal Reserve Chairman Kevin Warsh. The Philadelphia Semiconductor ETF, SOXX, advanced 1.44% to close at $599.73, marking a stark divergence from the prior session's broad chip rout and reversing most of Monday's losses in the hardware segment, while software stocks continued to retreat on higher rate expectations.

Today's biggest movers

ARM Holdings surges 5.7% on Bernstein agentic AI thesis

ARM Holdings PLC (NASDAQ: ARM) was the session's standout gainer, climbing 5.69% to $418.88 and extending a year-to-date advance of 265%. Analysts at Bernstein published a bullish note arguing that the shift to agentic AI systems, which involve autonomous task execution and complex multi-step orchestration, disproportionately benefits ARM-based central processing units over graphics processing units. The firm sees CPU intensity rising meaningfully as inference workloads and agent coordination steps multiply across enterprise deployments.

The move builds on ARM's record Q4 fiscal 2026 results, in which revenue rose 20% year over year to $1.49 billion, licensing revenue jumped 29% to $819 million, and data center royalties more than doubled as cloud AI demand accelerated. Multiple banks raised price targets: Mizuho to $425 from $360, Barclays to $360 from $250, and Bank of America to $335. ARM has rallied in three of the last four sessions, adding to gains posted when geopolitical conditions improved earlier this month (see our June 15 recap).

Applied Materials jumps 4.4% on four simultaneous analyst upgrades

Applied Materials Inc. (NASDAQ: AMAT) rose 4.35% to $592.92 as four banks raised price targets on the same session. Citi analyst Atif Malik moved his target to $710 from $550, citing bullish demand for NAND memory equipment and a widening gap between available DRAM supply and AI compute requirements. Cantor Fitzgerald raised to $650 from $575, flagging multi-year supply-constrained conditions and bookings visibility stretching into 2028. Barclays lifted to $590 from $500, tying the upside to wafer fab equipment spending that may top $200 billion industry-wide by 2027. UBS moved to $570 from $515 and reaffirmed a Buy.

Singapore's accelerating AI infrastructure buildout was cited across several notes as a demand catalyst. AMAT is up 120% year to date, having fully recovered from a May correction. The coordinated upgrades indicate rising institutional confidence in a sustained multi-year equipment upcycle.

Broadcom adds 4.3% as post-earnings AI revenue momentum holds

Broadcom Inc. (NASDAQ: AVGO) gained 4.30% to $392.90, continuing to trade on the tailwind of its fiscal Q2 2026 results. Revenue rose 48% year over year and AI semiconductor revenue soared 143% to $10.8 billion. Chief Executive Hock Tan guided the current quarter's AI revenue to approximately $16 billion, roughly tripling the prior-year figure. The initial market reaction was mixed, as some investors had expected an upward revision to the company's full-year AI revenue target of $100 billion; the stock has since recovered as the underlying trajectory reasserted itself.

According to 48 analysts surveyed by S&P Global, AVGO carries a consensus Strong Buy rating with a mean price target of $522.06, implying roughly 33% upside from Tuesday's close. The tripling AI revenue outlook provides a clear near-term catalyst framework, even as the stock's year-to-date gain of 13% looks modest relative to peers such as ARM and AMAT.

ServiceNow tumbles 5.8% as Fed hike signals compress SaaS multiples

ServiceNow Inc. (NYSE: NOW) fell 5.77% to $95.48, the sharpest decline in our 25-stock universe on Tuesday, extending a two-day slide of more than 11% as investors rotated out of software names following Monday's Federal Reserve meeting. Chairman Kevin Warsh signaled that rate cuts are not imminent and flagged upside inflation risk driven by the energy price shock stemming from the ongoing Iran conflict. Rising rate expectations reduce the present value of future earnings, the core mechanism compressing software multiples.

ServiceNow's underlying business is not the driver. First-quarter subscription revenue rose 22% year over year to $3.77 billion and the company raised its full-year forecast. The overhang is margin guidance: the recent Armis acquisition pulled full-year adjusted gross margin guidance to 81.5%, below analyst consensus. Despite the selloff, 83% of covering analysts hold buy ratings with a mean target near $149. This is a macro de-rating more than a business deterioration, a dynamic also evident across the software names tracked in Monday's recap.

Meta drops 5.4% on legal setback, layoff fallout, and Snap rivalry

Meta Platforms Inc. (NASDAQ: META) lost 5.44% to $567.58 on a convergence of legal, operational, and competitive pressures. A California state judge denied Meta's bid for a new trial in a youth mental health addiction case, stripping Section 230 liability protection for platform design choices. A federal multidistrict school district bellwether trial commenced June 15, escalating the legal risk profile. Internal reports published Tuesday described friction among the remaining workforce following a reduction of approximately 8,000 positions, with employees resisting expanded workloads tied to AI model training demands. Snap Inc. intensified competitive pressure on Monday when its chief executive unveiled new augmented reality glasses and publicly criticized Meta's hardware roadmap. The Threads platform crossing 500 million monthly active users was a positive milestone but could not offset the aggregate selling pressure.

Notable but quieter

Dell Technologies Inc. (NYSE: DELL), +3.77% to $419.32, continued riding the momentum of its May 29 earnings report, in which AI server revenue jumped 757% year over year to $16.1 billion and the company disclosed a $51.3 billion AI server order backlog. DELL is up 228% year to date and remains one of the clearest hardware infrastructure beneficiaries of the AI buildout.

Intel Corp. (NASDAQ: INTC), +3.46% to $121.10, was carried by the day's broad chip hardware tailwinds. Up 207% year to date, Intel has been one of the most dramatic reversals in our coverage universe, from a persistent laggard to a meaningful performer in the AI equipment cycle.

Super Micro Computer Inc. (NASDAQ: SMCI), -4.93% to $27.78, continued absorbing the impact of its $7 billion equity and convertible financing announced June 9 (see our June 10 recap). A Department of Justice investigation into potential export restriction violations on chip shipments to China remains an unresolved overhang.

Salesforce Inc. (NYSE: CRM), -4.14% to $155.02, approached its 52-week low after analysts reset fair value estimates from approximately $317 to $255, citing concerns that the company's AI strategy may disrupt the seat-based pricing model that underpins its revenue base. CRM is down 39% year to date.

What to watch

Micron Technology reports fiscal Q3 earnings on June 24 after market close, providing the first major data point on whether the DRAM and NAND demand recovery signaled today by AMAT's analyst upgrades is materializing in actual orders and pricing. NVIDIA Corp. (NASDAQ: NVDA) holds its annual general meeting the same day; any comments on GB200 and GB300 shipment timelines will move the broader chip sector. Federal Reserve officials are scheduled to speak throughout the week, and each appearance carries rate-outlook significance given the shift toward a potential 2026 hike. Energy prices tied to the Iran conflict remain the central macro variable for inflation expectations and software sector valuations.

Q2 2026 Update: ServiceNow Beats as AI Revenue Crosses $1 Billion

Updated July 2026: ServiceNow reported second-quarter 2026 results on July 22, 2026, delivering a broad beat that sent shares up roughly 5-6% the following session, recovering toward the $97-100 range after weeks of pressure near $91-92. Total revenue reached $3.987 billion, up 24% year over year. Subscription revenue grew 24.5% to $3.877 billion. Non-GAAP operating margin hit 29.5%, three points above guidance. Current remaining performance obligations (cRPO) grew 21.5% in constant currency to $13.20 billion.

The headline metric was AI annual contract value (AI ACV) crossing $1 billion, with net-new AI ACV up more than 40% sequentially. ServiceNow raised full-year 2026 subscription revenue guidance to $15.76-15.78 billion, implying 22.5% growth. Post-earnings analyst price target increases included Jefferies moving to $140, Evercore ISI to $160, and Oppenheimer to $140. The Q2 results underscore the dynamic from June 17: the rate-driven selloff was compressing the multiple on a fundamentally intact business, not a deterioration in underlying operations.

ServiceNow's strategic platform, unveiled at its Knowledge 2026 conference in May, positions the company as the "AI Control Tower for Business Reinvention." Key components include Autonomous Workforce agents executing workflows across IT, HR, CRM, and Security; Action Fabric, which allows third-party AI agents to trigger ServiceNow workflows securely; and Otto, a unified AI interface combining conversational AI with enterprise workflow execution. The $1 billion AI ACV confirms commercial traction for these products ahead of schedule.

Frequently Asked Questions

What is the ServiceNow (NOW) share price in 2026?

ServiceNow (NYSE: NOW) was at $95.48 on June 17, 2026, when this recap was first published. The stock declined further to approximately $91-92 in the weeks that followed, reflecting broad software sector pressure from rate-hike fears. After reporting strong Q2 2026 earnings on July 22, shares bounced roughly 5-6% to the $97-100 range. The 52-week range spans $81.24 to $211.48.

Why did ServiceNow stock fall sharply in June 2026?

NOW dropped 5.8% on June 17, 2026, alongside other software names, as Federal Reserve Chairman Kevin Warsh signaled rate cuts were not imminent and flagged upside inflation risk tied to energy price pressures. Higher rate expectations compress the present value of long-duration earnings, the core mechanism that reduces multiples for high-growth software companies. The selloff was a macro re-rating, not driven by any ServiceNow-specific business issue.

What is ServiceNow's AI revenue in 2026?

ServiceNow's AI annual contract value (AI ACV) crossed $1 billion in Q2 2026 (reported July 22, 2026), with net-new AI ACV growing more than 40% sequentially. The company's AI product suite spans IT, HR, CRM, and Security workflows, built around the "AI Control Tower" platform and the Autonomous Workforce agent layer announced at Knowledge 2026 in May 2026.

What do analysts say about ServiceNow stock?

Following Q2 2026 earnings, analyst price targets cluster around $140-160: Jefferies raised to $140 (Buy), Evercore ISI raised to $160 (Outperform), and Oppenheimer raised to $140 (Outperform). Approximately 86% of covering analysts hold Buy or equivalent ratings as of July 2026, with the consensus thesis centering on ServiceNow's AI monetization trajectory and enterprise workflow automation moat.

How does ServiceNow make money?

ServiceNow generates roughly 97% of its revenue from subscriptions, selling cloud-based workflow automation and AI agent platforms to enterprises across IT, HR, customer service, and security operations. Subscription revenue reached $3.877 billion in Q2 2026, up 24.5% year over year. The company charges based on user seats and module usage, with AI products now representing a fast-growing revenue layer on top of the core platform.

Last updated: July 2026

Not investment advice.