CNBC — 2026-07-18#

Lead Story#

The artificial intelligence sector experienced a sharp rotation this week as investors shifted capital away from chipmakers and toward hyperscalers and cybersecurity, dragging the tech-heavy Nasdaq down nearly 3%. The sell-off was exacerbated by a shocking warning from IBM, which saw its shares crash 26% after pre-announcing a dismal quarter and signaling that enterprise technology budgets are being rapidly redirected toward securing complex AI infrastructure.

Markets & Economics#

Geopolitics collided with energy markets as the U.S. military completed a seventh consecutive night of strikes against Iranian targets amid ongoing shipping disruptions. This escalated unrest pushed West Texas Intermediate crude up 4.5% to $82.49 a barrel, while international benchmark Brent crude surged 4.6% to $88.10. Meanwhile, Wall Street is grappling with a new era of central bank opacity; newly appointed Federal Reserve Chairman Kevin Warsh has drastically curtailed forward guidance, prompting firms like F/m Investments to deploy an AI-powered bot called “WarshGPT” to decode his 130-word meeting statements. In the equity markets, the PHLX Semiconductor Index shed 8% over the week on fears of an AI slowdown. However, analysts at UBS defended the sector, asserting demand continues to outstrip supply and projecting a massive 92% earnings expansion for the index this year.

Business & Earnings#

The Q2 earnings season kicked off with robust performances from major financial institutions, led by Goldman Sachs, which closed at a record high following strength in investment banking and trading. Wells Fargo also exceeded earnings and revenue expectations as it successfully diversifies beyond traditional lending into M&A advisory, recovering from an initial post-earnings dip over net interest income concerns. In the tech and telecom space, Telecom Italia’s board unanimously backed a €13 billion ($14.9 billion) takeover offer from state-backed Poste Italiane to expand cloud and digital infrastructure. Finally, Warren Buffett dropped a bombshell in a comprehensive interview, revealing he personally initiated Berkshire Hathaway’s $30 billion stake in Alphabet, and outlined plans to disburse his entire Berkshire fortune over the next eight years while officially ceasing future donations to the Gates Foundation.

Investing & Commentary#

With semiconductor stocks retreating from parabolic highs, market screens are identifying deeply oversold opportunities in companies like Oracle (RSI 17.4) and Super Micro Computer (RSI 25.3), both of which retain strong Wall Street ratings despite recent capital-raise pressures. Jim Cramer noted that the current pullback in AI infrastructure names is largely a function of profit-taking, emphasizing that the secular thesis remains fully intact due to persistent supply constraints and a relentless enterprise demand for compute power.

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