Technology Stocks End Week Lower Amid Earnings and Financing News

Technology stocks ended the week slightly lower due to a mix of earnings updates, share offerings, and financing news. Companies announced new stock and warrant issuances, convertible note offerings, and capital raises. AI-linked partnerships and product updates boosted ON Semi and Micron, but HPE's cautious outlook dragged on the sector.

Wipro, a leading IT services company, is set to release its second quarter (Q2) results for the financial year 2025-2026 (FY26) today. Investors are closely monitoring the company's performance, particularly in light of recent geopolitical and economic developments. Here are some key factors to watch out for:

1. H-1B Visa Impact and Tariff Uncertainties: The U.S. has increased the fee for new H-1B visa petitions by $100,000, which has led to a reduction in reliance on these visas by IT firms. While Wipro has a relatively lower dependence on H-1B visas compared to its peers, the company's handling of this situation and its impact on the deal pipeline will be scrutinized by investors.

2. Large Deals and Contract Wins: Wipro reported total deal wins worth $4.97 billion in the previous quarter, with 16 large deals and two mega deals worth $2.67 billion. The company's ability to secure new contracts and the impact of upfront costs linked to these deals will be closely watched.

3. Phoenix Project and Other Major Deals: The ramp-up of the Phoenix project, signed in Q4FY25, and other major deals are expected to contribute positively to the quarter. However, challenges such as furloughs and a weak demand environment remain.

4. Dividend Announcement: All eyes will be on Wipro to see if the company announces a dividend this time. In Q1FY26, Wipro had announced a dividend of Rs 5 per equity share.

5. European Business Recovery: Axis Direct expects Wipro to report 2% sequential revenue growth in its European business, which has been stable.

In addition to Wipro's Q2 results, the technology sector has been affected by a mix of earnings updates, share offerings, and financing news. Companies such as ON Semi and Micron have seen boosts from AI-linked partnerships and product updates, while Hewlett Packard Enterprise (HPE) has had a cautious outlook that has dragged on the sector.

The wide bandgap semiconductors market, expected to reach USD 8.46 billion by 2034, is driven by demand for faster, smaller, and more energy-efficient devices, with key growth drivers including electric vehicle adoption and renewable energy infrastructure, according to an OpenPR report.