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Sector Update: Tech Stocks Fall Late Afternoon

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Tech stocks declined late Friday afternoon, with the State Street Technology Select Sector SPDR ETF (XLK) falling 1.5% and the State Street SPDR S&P Semiconductor ETF (XSD) dropping 4%.

The Philadelphia Semiconductor index slumped 4.7%.

In corporate news, Qualcomm (QCOM) plans to use its new chip technology for data centers in smartphones, allowing AI to run better on mobile devices, Semafor reported, citing an interview with Executive Vice President Durga Malladi. The company is in talks with smartphone, personal computer, and auto manufacturers about an aspect of its new data center technology portfolio, the report said. Qualcomm shares were down 5.2%.

IBM's (IBM) technology capable of producing chips smaller than one nanometer represents a "major moment" for the semiconductor industry amid increasing AI workloads, Wedbush Securities said in a note on Friday. IBM has created what it calls the "world's first sub-1 nanometer chip technology," the company said Thursday. IBM shares jumped 4.5%.

Onsemi (ON) shares fell 23% after the chipmaker agreed to acquire semiconductor company Synaptics (SYNA) in a deal with an enterprise value of about $7 billion. Synaptics shares decreased 0.2%.

Microsoft-backed (MSFT) OpenAI is weighing an initial public offering as early as in 2027 after the expected IPO of rival Amazon.com-backed (AMZN) Anthropic, Bloomberg reported. OpenAI had been targeting a fall listing, more in line with Anthropic's possible October IPO, the report said. Microsoft shares rose 5.5%, and Amazon added 1%.

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