Both Texas Instruments and Intel surged on the same day, while ServiceNow and IBM plummeted. AI is splitting the tech sector into two worlds, and the deadlock in the Strait of Hormuz is about to add an energy bill for everyone.
1｜Chip Win, Software Loss: AI Splits the Tech Sector into Two Worlds
Texas Instruments skyrocketed 18% on Thursday, marking its best single-day performance since 2000. With Q1 revenue of $48.3 billion, a 19% year-over-year increase, the demand from data centers and industries exceeded expectations. Intel surged 20% after-hours, with an EPS of 29 cents compared to the expected 1 cent, a 22% growth in data center business revenue, and a Q2 guidance well above expectations.
On the other side, there was a freefall. ServiceNow dropped by 18%, IBM by nearly 9%, dragging down Salesforce, Oracle, Adobe, Palantir collectively. The financial reports of the two companies themselves were not poor, with IBM even exceeding revenue expectations by $3 billion. However, investors are pricing in a deeper fear: AI enables enterprises to build their own tools, and the moat of the SaaS subscription model is being eroded.
On the same day, the chipmakers hit a record high since 2000, while the subscription sellers fell to a new low for the year. The market is voting with its money. AI infrastructure is winning, AI upper-layer applications are losing.
(Source: CNBC / Bloomberg / IBTimes / Benzinga)
2｜Strait of Hormuz Deadlock Intensifies, Brent Crude Surges Past $105
Brent crude oil futures rose over 3% on Thursday, closing at $105.07 per barrel. WTI rose to $95.85. The U.S. and Iran are imposing mutual blockades in the Strait of Hormuz, with the U.S. military blockading Iranian ports since April 13 and Iran demanding all transit ships to obtain its permission. The U.S. has intercepted at least three Iranian oil tankers in Asian waters.
Israel's Defense Minister stated on Thursday that Israel is waiting for the U.S. green light to resume attacks on Iran to "finish off the reign of the Khamenei dynasty." Approximately 20% of global oil trade passes through the Strait of Hormuz.
The Nikkei index briefly touched a historic new high of 60,013 during trading, then fell back by 0.75%. Asian stock markets are generally under pressure. Players in the AI capital race are facing a physical constraint as the world's most critical energy passage is in a state of conflict when the power demand of data centers skyrockets.
(Source: CNBC / Bloomberg / NBC News / PBS)
3｜Meta to Lay Off 8,000 Employees, AI Budget Doubles to $135 Billion
Meta has announced a 10% reduction in its workforce, with around 8,000 employees set to leave starting on May 20. At the same time, 6,000 open positions will be frozen. The Chief People Officer stated in an internal memo that the layoffs were to "offset other investments we're making."
The destination of these investments is clear. Meta's AI expenditure budget for this year is around $135 billion, nearly double the $72 billion from last year. The four tech giants' combined 2026 capital expenditure is approximately $650 billion, with almost all of it flowing into AI infrastructure.
It's not about cost reduction and efficiency improvement, it's about substitution. Cutting labor costs, coupled with computational power costs. The budget structure is shifting from "hire people to do the job" to "buy chips to let machines do the job."
(Source: Bloomberg / CNBC / TechCrunch / NPR)
4｜Microsoft's $18 Billion Bet on Australian AI Infrastructure, Computing Power Territory Expands Southward
Microsoft has announced a $25 billion Australian dollar investment (approximately $18 billion) in Australia to expand its Azure AI supercomputing and cloud infrastructure. This is Microsoft's largest single investment in Australia's history, five times the $5 billion commitment from 2023. The plan is to increase local computing power by 140% by 2029, and commit to training 3 million Australians in AI skills by 2028.
Satya Nadella's personal announcement in person itself delivered a signal of priority. Against the backdrop of the Hormuz crisis driving up energy costs, the logic of diversifying computing infrastructure to the southern hemisphere has become more urgent. Do not keep all your eggs in one hemisphere, nor all your servers in one energy corridor.
(Source: Bloomberg / CNBC / Microsoft News Hub)
Worth Knowing ↓
Tesla fell 3.59% on Thursday as investors digested the impact of the capex increase. While Q1 earnings exceeded expectations, the capital expenditure target was raised from $20 billion to $25 billion, primarily directed towards AI and robotics. Delivery volume fell below expectations by around 7,600 vehicles, with an inventory backlog of 50,000 vehicles.
(Source: CNBC / Motley Fool)
Japan's manufacturing PMI sees fastest expansion in four years, Middle East supply chain concerns drive rush orders. South Korea's Q1 GDP grows by 1.7%, beating expectations and marking the fastest pace since Q3 2020. However, Asian stock markets overall come under pressure due to the Iran situation, with the Nikkei retracing from a historic high. (Source: CNBC / S&P Global)
California tech platform anti-self-preference bill stalls in a 3:3 Senate vote. The bill aims to restrict large tech platforms from favoring their own products in recommendations. California usually sets the tone for U.S. tech regulation, and this deadlock suggests that similar federal-level legislation may also face challenges. (Source: Tech Startups)
USDT market cap hits a record $188.88 billion. Tether simultaneously announces a freeze of $344 million USDT in coordination with OFAC, setting a single-day freeze record. As the market cap of stablecoins expands, regulatory oversight is also increasing. (Source: CoinDesk / Tether Official)
Google Cloud Next 2026 concludes today. The three-day event unveiled the TPU 8t/8i chips, Gemini Enterprise Agent Platform, Workspace Intelligence, and a $750 million enterprise AI fund. Anthropic announces it will harness exascale Google TPU compute starting in 2027. (Source: Google Cloud Blog / TechCrunch)
