ii Tech Focus: software sell-off, AMD, Cisco Systems

The AMD logo on a smartphone. Photo: Samuel Boivin/NurPhoto via Getty Images.

This week’s software sell-off overshadowed earnings season to dominate tech and artificial intelligence (AI) investor attention. The launch of Anthropic’s new AI legal tool sent shockwaves across the software sector globally.

• Invest with ii: Most-traded US Stocks | Buying US Shares in UK ISA | Cashback Offers

On Tuesday, stocks such as Pearson (LSE:PSON), Sage Group (The) (LSE:SGE), Experian (LSE:EXPN), RELX (LSE:REL), Informa (LSE:INF) and the London Stock Exchange Group (LSE:LSEG) plunged, reflecting concerns that the company behind the Claude chatbot could cannibalise these data-driven businesses. In the US, shares in Adobe Inc (NASDAQ:ADBE), Salesforce Inc (NYSE:CRM), ServiceNow Inc (NYSE:NOW) and others suffered large-scale drawdowns.

NVIDIA Corp (NASDAQ:NVDA)’s CEO Jensen Huang tried to soothe market jitters by saying that fears that AI could replace software was “the most illogical thing in the world”. However, selling continued on Wednesday, sending the Nasdaq index down another 1.5%.

• AI software sell-off: will FTSE 100 losers bounce back?
• Stockwatch: time to buy Relx shares after fresh plunge?

SpaceX and xAI

Elon Musk, the world’s richest man, has brought together two of his well-known companies. SpaceX has acquired xAI in a deal he said would create “the most ambitious, vertically integrated innovation engine on (and off) Earth with AI, rockets, space-based internet, direct-to-mobile device communications and the world’s foremost real-time information and free speech platform”.

The two companies are expected to continue operating separately. Bloomberg estimates that the merged entity would have a valuation of $1.25 trillion (£924 billion), with around $1 trillion attributable to SpaceX and the rest to xAI. It comes ahead of an expected IPO from SpaceX later this year, potentially raising a record-breaking $50 billion.

15 most-bought tech stocks on the ii platform

Source: interactive investor, 2-4 February 2026.

AMD earnings

Advanced Micro Devices Inc (NASDAQ:AMD) has been one of the most-bought tech stocks on the ii platform this week. The bulk of the buying came after AMD shares plunged over 17% on Wednesday, the biggest one-day drop since 2018. In its quarterly earnings report, investors were disappointed by its sales outlook – the company expects first-quarter revenue of around $9.8 billion, plus or minus $300 million, which is down from $10.27 billion in the fourth quarter.

Investors also shrugged off AMD’s fourth-quarter top and bottom-line beat. That’s because they were expecting more given the high levels of AI spending and the fact that AMD reported a $390 million boost from China revenue that hadn’t been factored into estimates.

• Are high fees chipping away at your investment returns?
• Sign up to our free newsletter for investment ideas, latest news and award-winning analysis

Although shares have had an extremely strong run over the last year, there are concerns that the gap between AMD and AI chip market winner Nvidia is widening and that AMD will struggle to catch up. In light of these earnings, several analysts including UBS, Morgan Stanley and Mizuho have cut price targets for AMD. However, the stock retains its consensus buy recommendation from analysts, according to Refinitiv.

Week Ahead

Tech earnings season continues next week with results from Spotify Technology SA (NYSE:SPOT), Cloudflare Inc (NYSE:NET), Cisco Systems Inc (NASDAQ:CSCO), Shopify Inc Registered Shs -A- Subord Vtg (NASDAQ:SHOP), Pinterest Inc Class A (NYSE:PINS), Arista Networks Inc (NYSE:ANET) and others.

Cisco Systems will report fiscal second-quarter earnings on Wednesday 11 February. There are high hopes going into these numbers, given the very positive share price reaction to its previous quarterly earnings in November. The company is expected to report Q2 adjusted earnings per share of $1.02 versus $1 last quarter on revenue of $15.11 billion versus $14.88 billion in fiscal Q1.

Investors will be paying close attention to its core networking business division which enjoyed 15% sales growth, beating expectations in Q1. Also front of mind will be how much the company is spending on its AI data centres as well any comments around the progression of its AI infrastructure orders.

Shares have performed well lately, gaining around 13% over the past three months and around 32% over the past year as Cisco looks to position itself at the heart of the AI excitement. Analysts are optimistic about prospects. According to Refinitiv, the stock enjoys a consensus buy recommendation with an average target price of $86.38, about 6.5% higher than the current share price.