According to CNBC, Lumentum Holdings rose 5% in premarket trading after its CEO told Bloomberg that the optical and photonic producer’s orders are booked through 2027, underscoring robust demand tied to the AI buildout. Coherent, another photonics company with Nvidia backing, advanced 4% in premarket trade.
ServiceNow slipped 1.5% after UBS cut its rating from buy to neutral, saying its confidence in the company’s AI-driven advantages has waned. Palo Alto Networks and CrowdStrike each rebounded by more than 2% after a sharp Thursday sell-off, as investor sentiment around a potential AI partnership with Anthropic and its Claude Mythos model regained footing.
In the memory and storage space, Sandisk rose nearly 3% after Mizuho reiterated an outperform stance and lifted price targets on several names in the group. Western Digital also rose more than 1.5% on the same note. Taiwan Semiconductor Manufacturing Co. jumped 2.5% after reporting a quarterly revenue record, with revenue up 35% year over year to 1.13 trillion New Taiwan dollars, or about $35.6 billion.
CoreWeave gained more than 4.5% following the company’s multi-year agreement with Anthropic to support the Claude model, with compute capacity slated to come online later this year.
Key takeaways
- Lumentum up 5% and Coherent up 4% as AI demand supports bookings through 2027, highlighting ongoing strength in photonics and AI-related supply chains.
- ServiceNow down 1.5% after UBS trimmed its view, indicating persistent scrutiny of AI adoption peers’ ability to scale gains.
- Palo Alto Networks and CrowdStrike rebound, signaling renewed investor interest in cybersecurity names amid AI-driven spend considerations.
- Sandisk up nearly 3% and Western Digital up over 1.5% on upgrades to targets, reflecting a broader memory/storage upcycle.
- TSMC reports record quarterly revenue, while CoreWeave signs a multi-year Anthropic compute deal, underscoring strong demand for AI hardware and cloud compute capacity.
What drove the move
Asset moves across the AI and compute spectrum reflected a mix of demand signals and shifting sentiment. Lumentum’s commentary on bookings through 2027 suggests continued ordering strength in optical and photonic components linked to AI deployment, a theme that also benefited Coherent, a fellow photonics player with investments from Nvidia. The duo’s gains point to investor optimism that AI infrastructure spending remains resilient even as software cultures adjust to faster deployment cycles.
At the same time, ServiceNow’s downgrade from UBS added a note of caution around software players’ ability to monetize AI advantages quickly enough to sustain premium valuations. The brokerage cited a softer view on how quickly large software platforms can translate AI opportunities into earnings, tempering earlier enthusiasm in the space.
Cybersecurity names Palto Alto Networks and CrowdStrike moved higher after Thursday’s declines, as confidence re-emerged in partnerships tied to AI-enabled security solutions. The rebound suggests investors are differentiating between direct AI platform exposure and ancillary security offerings, with the former still viewed as a growth lever in an AI-enabled world.
In the memory and storage space, Sandisk’s upgrade path from Mizuho — including a higher price target — helped lift the sector. Western Digital’s uptick followed in tandem, reflecting the market’s continued focus on supply-demand dynamics in memory hardware, a key input for data centers and AI workloads.
Taiwan Semiconductor’s record quarterly revenue, up 35% year over year to 1.13 trillion New Taiwan dollars (about $35.6 billion), underscored the broader strength in semiconductor fabrication and AI compute ecosystems. CoreWeave’s agreement with Anthropic to support Claude model compute further highlights the growing ecosystem around AI models, with compute capacity to come online later this year.
Market reaction
Premarket moves in the AI and compute arena remained broadly constructive, with photonics, memory, and semiconductor names showing strength on perceivable demand for AI infrastructure. The rebound in cybersecurity names also points to a disjointed reaction within tech equities, where AI-specific partnerships and capabilities can alter sentiment more quickly than broader software trends.
What analysts are saying
Analysts cited by market participants highlighted mixed signals from AI-driven cycles. UBS’s downgrade of ServiceNow reflects ongoing recalibration of the AI software playbook, with the firm stating that confidence in these dynamics has weakened. In the memory space, Mizuho reiterated an outperform stance on Sandisk and Western Digital and raised price targets, signaling a constructive view on near-term fundamentals for these names.
Beyond individual stock moves, investors are weighing the pace at which AI infrastructure investments translate into earnings and cash flow, versus the potential for shorter product cycles. The market continues to price in a high-beta exposure to AI hardware and services, while monitoring for signs of demand normalization or policy shifts that could affect capital expenditure cycles in data centers and cloud ecosystems.
Bigger picture
The day’s moves illustrate a broader theme: AI buildout remains a persistent driver of demand for specialized hardware and compute services, even as investors seek signs of sustained margin leverage and earnings visibility. Photonics players with exposure to AI-enabled manufacturing and data-processing equipment benefited from bookings through 2027, while memory and semiconductor firms reflected the ongoing need for high-end compute and data-center capacity.
In parallel, the Anthropic collaboration landscape—spanning CoreWeave’s compute deal and ongoing partnerships with AI model developers—continues to shape investor expectations for how AI workloads will be distributed across specialized providers. The interplay between hardware teams, software platforms, and AI model developers will likely influence stock performance in the near term as earnings and guidance updates roll in.
From a macro lens, the AI cycle remains a central theme for capital allocation in tech and semis, with Nvidia’s ecosystem playing a reinforcing role. Investors will watch for any incremental signals on AI demand intensity, capital expenditure trends in hyperscale cloud operators, and potential shifts in pricing and product cycles across AI hardware suppliers. Geopolitical and supply-chain considerations also factor into the sustainability of the AI buildout, particularly for memory, photonics, and wafer fabrication.
What to watch next: upcoming earnings reports and guidance from AI hardware and software names, any updates on AI partnerships and model deployments, and data on AI-related capital expenditure by cloud providers. The trajectory of AI infrastructure demand will help determine whether today’s moves herald a broader shift in risk appetite for technology equities.
