Nasdaq Plummets Nearly 4% as Semiconductor Stocks Weaken
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 05 2026
0mins
The major averages closed sharply lower, with the weakness concentrated in semiconductor and AI-related stocks that sent the Nasdaq down nearly 4%. Yesterday's sharp post-earnings selloff in Broadcom has raised concerns that expectations for the AI trade may have become too aggressive. The U.S. economy added 172,000 jobs in May, well above forecasts of 85,000, and the stronger-than-expected jobs report appears to be reinforcing the "higher-for-longer" interest-rate narrative as well.Meanwhile, reports indicate that efforts to ease tensions involving Iran have stalled, while uncertainty remains around shipping activity through the Strait of Hormuz. Oil prices have pulled back from their recent peaks, but are still on track for a weekly gain.Get caught up quickly on the top news and calls moving stocks with these five Top Five lists.1. STOCK NEWS:The S&P Dow Jones Indicesproposed a new change to the S&P 500 that would deny SpaceXAdditionally, SpaceX entered into a $920M per monthwith GoogleLululemon, citing "headwinds" and additional actions to reposition where neededDocuSignprovided areport for Q1Guidewirealso provided areport for Q32. WALL STREET CALLS:Teslato Neutral at JPMorgan and to Hold at Erste GroupChipotleto Overweight at JPMorganCrowdStriketo Hold at BerenbergLululemonto Underperform at BNP Paribas and to Neutral at BTIGCraig-Hallumon Aurora Innovation, initiated with a Buy3. AROUND THE WEB:Metais weighing raising tens off billions in a new share sale to finance its AI efforts, FT reportsAdditionally, Meta will charge up to $200 per month for its "Hatch" AI agent, The Information saysApollo Global Managementno longer intends to make a takeover offer for Bodycote, ending discussions for the over $2.04B proposal, WSJ saysAppleis expected to introduce a modern version of its chatbot, Siri, that will look more like ChatGPT when the company hosts its annual developer conference next week, WSJ reportsSingapore Airlines is in discussions with Airbus and Boeingto potentially purchase at least 50 jets, Reuters reports4. MOVERS:Concrete Pumpinggained afterand raising its guidance for FY26Merlinrose after completing thefor its C-130J autonomy program with the U.S. Special Operations CommandServiceTitanwas higher afterKeel Infrastructurewas lower after announcing aPlanet Labsfell afterand providing guidance for Q25. EARNINGS/GUIDANCE:G-III Appareland raised its guidance for FY27ABMand backed its guidance for FY26Cooper Companies, with CEO Al White commenting, "We delivered a strong second quarter"Torrid, with EPS and revenue beating consensusSamsaraand raised its guidance for FY27INDEXES:The Dow fell 695.15, or 1.35%, to 50,866.78, the Nasdaq lost 1,121.52, or 4.18%, to 25,709.43, and the S&P 500 declined 200.57, or 2.64%, to 7,383.74.
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Analyst Views on META
Wall Street analysts forecast META stock price to rise
44 Analyst Rating
37 Buy
6 Hold
1 Sell
Strong Buy
Current: 542.870
Low
655.15
Averages
824.71
High
1117
Current: 542.870
Low
655.15
Averages
824.71
High
1117
About META
Meta Platforms, Inc. is building human connections, powered by artificial intelligence and immersive technologies. The Company's products enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality (VR) and mixed reality (MR) headsets, augmented reality (AR), and wearables. It also helps people discover and learn about what is going on in the world around them, enabling people to share their experiences, ideas, photos, videos, and other content with audiences ranging from their closest family members and friends to the public at large. The Company's segments include Family of Apps (FoA) and Reality Labs (RL). FoA segment includes Facebook, Instagram, Messenger, WhatsApp and Threads. RL segment includes its virtual, augmented, and mixed reality related consumer hardware, software and content. Its product offerings in VR include its Meta Quest devices, as well as software and content available through the Meta Horizon Store.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Differentiation: Arena will differentiate itself from existing platforms like Polymarket and Kalshi by utilizing a video game-like points system instead of real-money wagers, which could attract a broader user base and lower the barriers to entry for participation.
- Internal Testing Phase: Currently, Arena is in the internal testing phase, and while its official release is uncertain, the project's advancement suggests that Meta is actively exploring new business models to adapt to the evolving market demands.
- Integration Plans: Meta plans to eventually integrate parts of Arena into Facebook and Messenger, a strategic move that could enhance user engagement and potentially create new revenue streams, further solidifying its leadership position in the social media landscape.
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- New Smart Glasses Launch: The introduction of $299 smart glasses, $80 cheaper than previous models, aims to attract more consumers; if successful in selling 40 million units, this could generate $20 billion in revenue, marking a significant new growth avenue for the company.
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See More
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- Smart Glasses Market Potential: The new $299 smart glasses are $80 cheaper than the previous entry-level model, and if sold at an average price of $400, selling 40 million units could generate $2.8 billion in revenue, although this would be shared with partner EssilorLuxottica.
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- New App Development: CEO Mark Zuckerberg has urged his team to explore partnerships with Polymarket and Kalshi to develop a prediction market app named Arena, targeting 18 to 34-year-olds with a goal of reaching 100 million monthly active users, indicating the company's focus on the younger demographic.
- Market Differentiation: Arena will differentiate itself from existing platforms like Polymarket and Kalshi by utilizing a video game-like points system instead of real-money wagers, which could attract a broader user base and lower the barriers to entry for participation.
- Internal Testing Phase: Currently, Arena is in the internal testing phase, and while its official release is uncertain, the project's advancement suggests that Meta is actively exploring new business models to adapt to the evolving market demands.
- Integration Plans: Meta plans to eventually integrate parts of Arena into Facebook and Messenger, a strategic move that could enhance user engagement and potentially create new revenue streams, further solidifying its leadership position in the social media landscape.
See More
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- Stock Market Returns Tied to Trump: During Trump's presidency, the iconic Dow Jones, S&P 500, and Nasdaq indices surged by 57%, 70%, and 142% respectively, indicating a strong correlation between Trump's policies and stock market performance.
- Record IPO by SpaceX: SpaceX went public on June 12, raising $75 billion, nearly tripling Saudi Aramco's 2019 IPO, and briefly achieving a valuation close to $3 trillion, marking the largest IPO in Wall Street history.
- Impact of Fast-Track Inclusion Rules: New Nasdaq and Russell Index rules allow large IPOs to be included in indices after just 15 trading days, providing SpaceX, Anthropic, and OpenAI with a rapid entry path, which could lead to increased market volatility.
- Historical Lessons on IPO Performance: An analysis by Truist Financial revealed that only 43% of 30 major tech IPOs since Facebook were positive six months post-debut, with an average year-one drawdown of 55%, highlighting the significant risks associated with chasing hot IPOs.
See More
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- Escalating Financial Losses: Meta is losing nearly $20 billion annually on its AI initiatives, and despite reporting a 33% revenue growth in Q1, the stock has dropped 17% year-to-date due to rising capital expenditures and layoffs, raising investor concerns about its financial health.
- Smart Glasses Sales Surge: The new smart glasses, priced at $299, sold over 7 million units last year in partnership with EssilorLuxottica, a significant increase from just 2 million combined in 2023 and 2024, indicating that smart glasses are gradually entering the mainstream market.
- Reality Labs Revenue Stagnation: Meta's Reality Labs reported $2.2 billion in revenue for 2025, essentially flat year-over-year, while incurring a staggering $19.2 billion loss due to AI infrastructure spending, highlighting the urgent need for improved profitability in this division.
- Cloud Computing Business Potential: Meta has yet to enter the cloud computing market, with CEO Mark Zuckerberg stating that it is “definitely on the table,” and given the skyrocketing demand for cloud infrastructure in the AI era, entering this market could significantly diversify its revenue streams and support long-term growth.
See More
Meta's Smart Glasses Aim to Drive Growth
- Quarterly Growth Surge: Meta reported its fastest quarterly growth since the pandemic in Q1, with a 33% revenue increase, despite a 17% year-to-date stock decline, indicating potential market demand that could restore investor confidence if leveraged effectively.
- New Smart Glasses Launch: The introduction of $299 smart glasses, $80 cheaper than previous models, aims to attract more consumers; if successful in selling 40 million units, this could generate $20 billion in revenue, marking a significant new growth avenue for the company.
- AI Strategy Challenges: Reality Labs reported $2.2 billion in revenue for 2025, with expenses reaching $19.2 billion, leading to significant losses; Meta must achieve higher returns on AI infrastructure investments to alleviate investor concerns regarding capital expenditures.
- Cloud Computing Potential: As Meta has yet to enter the cloud computing market, CEO Mark Zuckerberg's interest in this area could open new revenue streams, especially given the skyrocketing demand for cloud infrastructure, enhancing the company's competitive position.
See More
Can Meta's New $300 Glasses Turn Around the Stock?
- Quarterly Growth vs. Stock Decline: Despite reporting its fastest quarterly growth since the pandemic with a 33% revenue increase, Meta's stock has fallen 17% year-to-date due to rising capital expenditures, layoffs, and an increasingly undisciplined AI strategy.
- Smart Glasses Market Potential: The new $299 smart glasses are $80 cheaper than the previous entry-level model, and if sold at an average price of $400, selling 40 million units could generate $2.8 billion in revenue, although this would be shared with partner EssilorLuxottica.
- Financial Challenges at Reality Labs: Meta's Reality Labs reported $2.2 billion in revenue for 2025, nearly flat year-over-year, and incurred a $19.2 billion loss due to AI infrastructure spending, with 70% of 2026 expenses expected to go towards wearables, indicating ongoing financial strain.
- Strategic Consideration for Cloud Business: As the only major hyperscaler without a cloud computing business, CEO Mark Zuckerberg has indicated that starting one is “definitely on the table,” which could enhance Meta's growth potential in the booming AI-driven cloud infrastructure market.
See More
Qualcomm Doubles Non-Handset Revenue Target to $40 Billion
- Increased Non-Handset Revenue Target: Qualcomm raised its fiscal 2029 non-handset revenue target from $22 billion to $40 billion during its investor day, nearly doubling its previous goal, which underscores the company's commitment to diversifying away from smartphone dependency.
- Data Center Revenue Outlook: For the first time, Qualcomm set a target of over $15 billion in data center revenue by fiscal 2029, despite currently negligible earnings, reflecting its ambition in the data center market, particularly after securing a multi-year deal with Meta.
- Automotive Business Growth: Qualcomm's automotive revenue surged 38% year-over-year to a record $1.3 billion in fiscal Q2 2026, with management targeting $10 billion in annual revenue by fiscal 2029, indicating strong growth potential in the automotive sector.
- Market Competition Challenges: Despite ambitious targets, Qualcomm faces significant challenges in the competitive data center market dominated by Nvidia, with its AI accelerator not expected to begin commercial sampling until mid-2027, highlighting the hurdles in capturing market share.
See More
