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Sector Update: Tech Stocks Fall Late Afternoon

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Tech stocks were lower late Wednesday afternoon, with the State Street Technology Select Sector SPDR ETF (XLK) falling 1.3% and the State Street SPDR S&P Semiconductor ETF (XSD) dropping 2.3%.

The Philadelphia Semiconductor index shed 2.4%.

In sector news, DeepSeek is planning a new fundraising round at a valuation of about 500 billion yuan ($74 billion) ahead of a potential listing on Shanghai's STAR Market, Reuters reported. According to the report, DeepSeek is looking to raise up to 50 billion yuan just weeks after the funding round in June. The startup has begun early discussions on a potential IPO, targeting an initial filing this year, although the plans remain subject to change, multiple reports said.

In corporate news, Palantir (PLTR) Chief Technology Officer Shyam Sankar said China's latest AI models have been developed partly through the unauthorized use of technology created by AI companies in the US, Bloomberg reported Wednesday, citing his interview. He added that these Chinese open-source AI models are largely the result of "distillation attacks," the report said, adding that the technique refers to when developers use results from existing AI systems to train new models with similar capabilities at a lower cost. Palantir shares were up 0.3%.

Nvidia (NVDA) has shipped only a limited number of H200 AI chips to China and Hong Kong despite the issuance of US export licenses, Under Secretary of Commerce for Industry and Security Jeffrey Kessler told a congressional hearing on Tuesday. Nvidia shares were down 0.2%.

Microsoft (MSFT) is overhauling its cybersecurity business to capitalize on corporate demand for AI-powered security tools, The Information reported. Hayete Gallot, who took over the security business in February, has directed teams to build AI security products while cutting some traditional offerings and consolidating engineering teams, according to the report. Microsoft shares rose 2.9%.

Apple (AAPL) has held talks with bankers in recent months about possible deals for chip companies, as it looks to enhance its efforts to build server chips for running AI, The Information reported. Apple shares climbed 3.7%.

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