Expert Insights

U.S. equities plunged Thursday, reversing midterm election euphoria with a sharp selloff led by memory and semiconductor stocks in the tech sector. 

The Nasdaq-100 (NDX) fell 6.36%, erasing $2.3 trillion in market value and marking its biggest drop since April 2025. The PHLX Semiconductor Index (SOX) slumped more than 12%. Nvidia (NVDA) shares were down 9%, while SanDisk (SNDK) fell 22% and Western digital (WDC) slid 18%. 

The S&P 500 (SPX) was down 4.4%, with every sector declining. Only Consumer Staples and Utilities slipped less than 1%. The Dow Jones Industrial Average ($DJI) was off by 3.4%, and the small-cap Russell 2000 (RUT) was off by 4.4%. 

The price of WTI crude oil also reversed course with a rise of 3.3% to near $91 per barrel Thursday afternoon. Shares of ConocoPhillips (COP) sank 1% after it reported higher earnings and revenue and raised its quarterly dividend. 

Five things to watch from Thursday's market action: 

Microsoft Reassesses Neocloud Deals, Tightens Oversight of IREN, Nebius & Nscale 

Microsoft is reportedly tightening oversight of data center projects involving IREN (IREN), Nebius (NBIS), and Nscale as it reassesses its reliance on neocloud providers, according to Bloomberg. Microsoft is prioritizing expansion of its own data centers and stepping away from projects it considers higher risk, though it has not ruled out future neocloud deals. According to the report, Microsoft and IREN have also negotiated a revised timeline that could delay IREN’s Texas project by several weeks or months, while Microsoft has decided not to exercise an option to more than double its existing Nscale agreement. 

Iren Reports Mixed Earnings, AI Roadmap Remains on Track 

IREN, one of the neocloud players in the AI space, has come under pressure over the past several weeks and reported earnings after the close. The company posted strong fiscal Q1 growth, with AI Cloud revenue nearly tripling, sequentially, to $200 million and total revenue rising 66% to $228 million. Adjusted EBITDA of $66 million missed expectations, but the company said its $4 billion annual recurring revenue target is fully contracted and funded, with operations expected to reach that level by early 2027. Shares jumped more than 11% in after-hours trading. 

Cloudflare Earnings Beat Estimates 

Cloudflare (NET) will report earnings in Thursday’s postmarket session as the wider cybersecurity sector struggles to regain its footing after significant declines during October.

Analysts are looking for earnings-per-share of $0.35 against $0.27 last year (a 29.6% increase), and for revenue of $734.31M compared to $562.03M during the same time frame (a 30.6% increase).

Cloudflare’s services are essentially a protective barrier between a website and the rest of the internet that can stop cyberattacks, guard private data, and increase website access speed. The company stands out for its massive size and scale but also has the unusual competitive distinction of offering a free tier of services.

Here are three things to think about as Cloudflare reports earnings.

Cybersecurity & AI Connections: Cybersecurity has been a standout area of the tech sector during 2026, with the First Trust NASDAQ Cybersecurity ETF (CIBR) up more than 36% year-to-date. However, this comes after a 12% slide from the all-time highs of 110.68 on Oct. 12 amid a turbulent month. Last month, the group, which also includes Okta (OKTA), CrowdStrike (CRWD), and Palo Alto Networks (PANW), faltered in tandem with other high-flying names in the semiconductor and artificial intelligence hyperscaler arenas. The rise of AI means malicious actors have extremely sophisticated tools at their disposal, which means cybersecurity and AI are becoming increasingly intertwined as corporations need greater defenses against these new and powerful potential attacks.

Analysts: Recent analyst coverage on Cloudflare has been mixed. JPMorgan on Nov. 3 upgraded Cloudflare to Overweight from Neutral with an unchanged price target of $350, saying the move comes after the stock’s sharp pullback and that they believe it could accelerate revenue growth. Bernstein also expressed a somewhat more optimistic outlook on Oct. 29, raising its price target to $245 from $181 and keeping its Market Perform rating – however, this new target is still below current share prices. Meanwhile, Jefferies on Nov. 2 lowered its target to $320 from $350 and kept its Hold rating. The firm said Wall Street earnings expectations create a “high bar” to clear but that it could be feasible.

Technicals & Options Market: Cloudflare’s price exhibits a downward trajectory connecting its all-time high of $370.35 on Oct. 6 and a subsequent high at $337 on Oct. 27. Price recently breached a repeated floor near the $274 level from late August to early September, with potential support near $250 based on a pre-gap high from Jul. 6 and a subsequent low that filled it on Jul. 28 and then rallied. As for the options market, Friday's weekly Nov. 6 expiration shows a potential expected move of +/-$33.4 (13.1%). Meanwhile, the monthly Nov. 20 expiration gives a possible expected move range of +/-$45.0 (17.6%), which would give a lower boundary of around $211 that would roughly align with a notable low point from Jun. 22.