GlobalFoundries spearheaded the sector's gains, with its stock price surging more than 10% after the company reported quarterly revenue that surpassed analyst expectations. The contract chipmaker has benefited from steady demand for specialty semiconductors used in the automotive industry and other industrial applications, signaling resilience in segments beyond high-end computing.

Cisco Systems also found favor in late trading, reporting higher revenue for its fiscal second quarter. The networking equipment provider cited increased orders from AI hyperscalers as a primary driver for growth, as cloud providers continue to build out the physical infrastructure required to support large-scale machine learning models.

Shifting Sentiment and Margin Pressures

Meta Platforms remained largely unchanged even after a regulatory filing revealed that Bill Ackman’s Pershing Square has built a new position in the company worth approximately $2 billion. The investment follows Meta's recent earnings report, which suggested the social media giant is successfully leveraging artificial intelligence to drive higher returns in its core digital advertising business.

However, the market's appetite for AI spending has its limits, as evidenced by a steep decline in Shopify shares. The e-commerce platform warned that its continued investment in proprietary AI capabilities would weigh on its profit margin outlook. According to the company's report, the decision to prioritize long-term technological infrastructure over short-term margins triggered the sharp pullback from investors.