US Stock Market Outlook: Iran-Pakistan Talks, Strong Earnings Boost Tech Stocks

Market Overview

On Friday morning, negotiations between the US and Iran took a new turn, leading to a collective rise in the three major futures indices. As of the time of writing, Dow futures were up 0.01%, Nasdaq futures rose 1.4%, and S&P futures increased by 0.47%.

Pre-Market Movements

Star Tech Stocks
Star tech stocks saw widespread gains in pre-market trading, with ASML rising over 4%, Oracle up more than 2%, and Microsoft and Broadcom both increasing by over 1%.

Popular Chinese Stocks
Most popular Chinese stocks also rose in pre-market trading, with Pony.ai up over 3%, XPeng gaining more than 2%, and Alibaba and Baidu both increasing by over 1%.

Semiconductor Stocks
Led by Intel, some semiconductor stocks surged in pre-market trading, with AMD up over 11% and Arm Holdings rising more than 8%. Intel's stock soared over 30% in pre-market trading, driven by strong Q1 earnings and an optimistic Q2 outlook.

Intel's Strong Performance

Intel's Q1 revenue grew 7% year-on-year to $13.6 billion, exceeding analyst expectations of $12.4 billion. The Data Center and AI segment generated $5.1 billion, a 22% increase, reflecting strong demand for data center chips driven by AI expansion. CEO Pat Gelsinger noted that customer demand continues to grow, and the company is focused on expanding production capacity.

Looking ahead, Intel expects Q2 revenue to reach between $13.8 billion and $14.8 billion, significantly above the analyst average estimate of $13 billion.

Tesla's Cybercab Production

Tesla's CEO Elon Musk confirmed that production of the Cybercab has officially started at the Texas Gigafactory. However, he warned that initial output will be "very slow" due to new supply chain constraints, with significant growth expected by the end of the year.

Oklo's Stock Surge

Nuclear startup Oklo Inc saw its stock rise 5% in pre-market trading, reaching a two-month high. Following a partnership with Meta, Oklo has now teamed up with AI chip giant NVIDIA to advance nuclear infrastructure and AI-enabled research.

SAP's Strong Q1 Results

SAP SE reported a strong Q1, with all core metrics exceeding expectations, particularly in cloud business driven by AI. The company's cloud revenue grew 27%, with core cloud ERP revenue increasing by 30%. SAP maintains an optimistic outlook for the full year 2026.

Google Cloud Next Highlights

At the Google Cloud Next conference, it was revealed that 75% of cloud customers are using AI products. Analysts from major banks maintained buy ratings on Google, with target prices ranging from $370 to $405.

Microsoft Stock Analysis

Microsoft's stock has dropped about 20% since last August, but analysts believe this decline is an emotional overreaction. The company is expected to report solid Q3 earnings next week, with revenue projected at $81.4 billion, a 16% year-on-year increase.

Taiwan's Fund Holding Limit Increase

Taiwan's Financial Supervisory Commission announced an increase in the single stock holding limit for funds from 10% to 25%, which is expected to benefit TSMC significantly.

Avis Stock Volatility

Avis stock rebounded 2% in pre-market trading after a dramatic drop of 48% the previous day, following a month of rapid price increases.

Conclusion

The market is reacting to various factors, including strong earnings reports, strategic partnerships, and geopolitical developments. Investors are closely monitoring these trends as they unfold.