The tech sector is experiencing significant volatility, particularly in artificial intelligence software stocks. Palantir Technologies, for instance, saw its stock (PLTR) drop sharply by 11.6% to close at $139.54, marking a 22% decline in 2026. This downturn occurred despite the company reporting better-than-expected fourth-quarter earnings and revenue, reflecting a wider pullback in the AI and software markets.
Despite a 10% dip in its stock after fiscal 2026 second-quarter results, Microsoft demonstrates robust AI growth. Its Azure cloud computing division reported a 39% year-over-year revenue increase. Azure's remaining performance obligations surged 11% to $625 billion, indicating substantial demand for AI workloads. Similarly, Google's parent company, Alphabet, posted strong fourth-quarter 2023 results, with revenue of $86.3 billion. Google Cloud sales rose 26% to $9.2 billion, driven by AI investments, including its Gemini chatbot.
Major players are committing heavily to AI, with Amazon CEO Andy Jassy announcing plans for $200 billion in capital expenditures for 2026, seeing a "very unusual opportunity" in the sector. This massive investment fuels demand for energy and data center infrastructure. Dominion Energy, for example, generates over 25% of its revenue from data centers in Virginia, while GE Vernova's stock surged 109% in the past year, securing over $2 billion in data center orders in 2025.
Beyond infrastructure, AI is transforming specific industries. Lawhive, an AI-powered legal services firm, recently secured $60 million in Series B funding, leveraging an AI operating system to assist human lawyers and growing its annual revenue to over $35 million. However, broader market concerns persist, with a tech-driven selloff on February 5, 2026, seeing the Nasdaq hit its lowest point since November, fueled by worries over extensive AI capital spending and the US job market. Bank of America, meanwhile, suggests buying SAP amidst the software selloff, viewing it as less vulnerable due to its embedded GenAI strategy.
Key Takeaways
- Palantir stock (PLTR) fell 11.6% to $139.54, down 22% in 2026, despite strong Q4 earnings, reflecting a broader tech stock pullback.
- Microsoft's Azure cloud revenue grew 39% year-over-year, with remaining performance obligations reaching $625 billion, indicating high demand for AI workloads.
- Google's Alphabet reported Q4 2023 revenue of $86.3 billion, with Google Cloud sales up 26% to $9.2 billion, boosted by AI investments like its Gemini chatbot.
- Amazon CEO Andy Jassy plans to invest $200 billion in capital expenditures in 2026, highlighting a significant opportunity in AI.
- Dominion Energy derives over 25% of its revenue from data centers in Virginia, powering the AI boom.
- GE Vernova's stock surged 109% in the past year, securing over $2 billion in data center orders in 2025, tripling sales in that area.
- Lawhive, an AI-powered legal services firm, raised $60 million in Series B funding, with annual revenue exceeding $35 million.
- Bank of America recommends buying SAP stock, believing it is less vulnerable to generative AI disruption due to its embedded GenAI strategy.
- The stock market experienced a tech-driven selloff on February 5, 2026, with the Nasdaq reaching its lowest point since November, partly due to concerns over massive AI capital spending.
- Bitcoin plunged 14% on February 5, 2026, marking its worst day in nearly four years, amidst the broader tech selloff.
Palantir stock drops after Q4 earnings amid AI concerns
Palantir Technologies stock (PLTR) dropped sharply on Wednesday, giving back gains from its fourth-quarter earnings report. The company's shares fell 11.6% to close at $139.54. This retreat means Palantir stock has now fallen 22% in 2026. The decline happened amid continued ups and downs in artificial intelligence software stocks.
Palantir stock falls 14 percent despite strong earnings
Palantir stock dropped 14% on Wednesday, becoming a main victim of a broader tech stock pullback. This decline occurred even though the company had posted better-than-expected earnings and revenue for the fourth quarter. The drop reflects a wider downturn in artificial intelligence and software stocks. Palantir is experiencing a challenging year in 2026.
Microsoft stock dips but shows strong AI growth
Microsoft's stock crashed 10% after the company reported its fiscal 2026 second-quarter results on January 28. Despite this drop, Microsoft's Azure cloud computing division saw its revenue increase by 39% year over year. Azure's remaining performance obligations also rose 11% to $625 billion, showing high demand for AI workloads. The stock now trades at about 25 times earnings, making it potentially attractive to investors. Microsoft's current price is $414.55 as of February 4, 2026.
Google shows strong growth in AI and advertising
Google's latest quarterly report shows its internet business is thriving in the age of artificial intelligence. For the fourth quarter of 2023, Alphabet, Google's parent company, reported revenue of $86.3 billion, beating analyst predictions. Net income significantly increased to $30.6 billion, or $2.48 per share. Digital advertising revenue grew 13% to $65.9 billion, and Google Cloud sales rose 26% to $9.2 billion. The company's AI investments, including its Gemini chatbot, are boosting growth across its services.
Bank of America suggests buying SAP amid AI software selloff
Software stocks are falling due to worries that generative AI will hurt their profits. However, Bank of America suggests that global enterprise software company SAP is unfairly punished and recommends buying its stock. Analyst Frederic Boulan believes SAP is less vulnerable because it uses its own customer data to embed GenAI into its complex platforms. SAP's American Depositary Receipts have dropped 30% in the last six months and 19% this year. Bank of America has a $308 price target for SAP, implying a 56% upside.
Dominion Energy powers AI boom with data center growth
Dominion Energy is a key player in the artificial intelligence boom, providing power to numerous data centers. Over 25% of its revenue comes from data centers located in Virginia, home to the world's largest cluster of these facilities. The company's CEO, Robert Blue, noted continued high demand for data center capacity. In the third quarter, Dominion Energy's operating earnings increased by 10.2% to $921 million. The company also offers a 4.4% dividend yield and trades at a lower price-to-earnings ratio than major tech indexes.
GE Vernova thrives powering AI data centers
GE Vernova, an energy equipment and services company, is emerging as a significant winner in the AI boom. The company's stock has surged 109% in the past year, showing strong growth. Its electrification segment saw its backlog increase by $11 billion to $35 billion, driven by demand for grid and data center equipment. In 2025, GE Vernova secured over $2 billion in orders directly from data centers, tripling its sales in that area from 2024. The company reported strong fourth-quarter 2025 results, with revenue of $11.0 billion and net income of $3.7 billion.
Amazon CEO Andy Jassy plans big AI investments
Amazon CEO Andy Jassy announced plans to invest heavily in artificial intelligence. The company revealed in its fourth-quarter earnings release that it intends to spend $200 billion on capital expenditures in 2026. Jassy stated that Amazon sees a "very unusual opportunity" in AI. This aggressive investment strategy aims to capitalize on the growing potential of AI technologies.
AI and crypto markets see sharp declines
On Thursday, February 5, 2026, the stock market experienced a significant tech-driven selloff, with the Nasdaq reaching its lowest point since November. This downturn was fueled by concerns over massive AI capital spending and the US job market. Bitcoin also plunged 14%, marking its worst day in nearly four years and losing half its value in four months. Major tech stocks like Amazon, Coinbase, and SuperMicro Computer saw sharp declines. A JOLTS report further deepened worries by showing a sharp rise in layoffs and fewer job openings.
Lawhive raises $60 million for AI powered legal services
Lawhive, an AI-powered legal services firm, secured $60 million in Series B funding, led by Mitch Rales. Founded in 2020, Lawhive uses an AI operating system to assist its network of human lawyers, handling routine matters like family law and property transactions. The company's annual revenue now exceeds $35 million, growing seven-fold in the past year. Lawhive aims to make legal services more accessible and affordable for individuals and small businesses. Its technology automates tasks, allowing lawyers to manage more cases and potentially earn significantly more.
Sources
- Palantir Retreats, Gives Back Gains From Q4 Earnings Amid AI Volatility
- Palantir Stock Drops 14% in AI and Software Pullback. It’s Having a Terrible 2026.
- Is This Artificial Intelligence (AI) Stock a Smart Buy After Its Recent Pullback?
- Google's quarterly results paint a picture of an internet powerhouse getting stronger in AI age
- The ‘AI to kill software’ narrative is wrecking the group. But Bank of America says buy this stock in the sell-off
- Forget Tech Stocks: This Is the AI Power Play That Wall Street Is Missing for 2026
- Forget AI Stocks: This Energy Giant Could Be the Real Winner of 2026
- Amazon CEO Andy Jassy plans to 'invest aggressively' in AI
- Trading Day: AI, crypto routs deepen
- Lawhive, which started out selling to tech to law firms but then became one, raises $60 million in new funding
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