Major US Tech Companies Decline in Premarket Trading
In premarket trading on Monday, shares of major US technology companies showed declines: Tesla lost 0.7%. An exception was Sony's stock, which rose more than 7% before the main session opened.
Quiet Changing of the Guard: What the Red Premarket of Tech Giants on May 11 Really Means
The screen of my terminal at 4:30 AM New York time was glowing red. Not catastrophic red—no 2-3% crashes—but a methodical, calm red. Minus 0.3% for Microsoft, Nvidia, Apple. Minus 0.4% for Meta and Amazon. Minus 0.6% for Google. Minus 0.7% for Tesla. The entire FAANG group, along with Nvidia, synchronously, as if on command, went negative in premarket trading. To an inexperienced eye, it looks like typical nervousness before a big week. But when on the same screen the only green spot is Sony, up 7% and above—that's no longer noise. It's a signal the market sends to those who know how to listen.
What's Really Happening
May 11, 2026, is not just "a Monday with a red premarket." It's the first day of the most macroeconomically and geopolitically packed week of the year. And professional capital managers aren't waiting for the market open to start repositioning. They're doing it now, in the quiet pre-market hours.
Look at the calendar. On Wednesday, May 13, Donald Trump flies to Beijing for a two-day summit with Xi Jinping. The agenda: semiconductor export restrictions, rare earth metals, Taiwan. Nvidia CEO Jensen Huang publicly stated he's ready to "tag along with Trump" to the summit to advocate for AI infrastructure unity. Do you think an institutional investor managing $50 billion will wait for the outcome of the negotiations while holding a full position in Nvidia? No, they'll cut 1-2% exposure right now, in the premarket.
On Friday, May 15, Jerome Powell officially steps down as Fed Chair. That same day, the Senate begins the confirmation process for Kevin Warsh—a hawk who in 2022 publicly criticized the Fed for raising rates too slowly. The Banking Committee approved his nomination 13-11 along party lines. A man who called Powell's policy an "inflationary dangerous game" will soon sit in the Fed Chair's seat. And the April CPI, released just before his inauguration, may show that the energy shock from the closure of the Strait of Hormuz has begun seeping into core inflation.
Simultaneously, the Cerebras Systems IPO, the largest of 2026. The AI chip maker, a direct competitor to Nvidia in inferencing, raised its price range to $150-$160 per share, aiming to raise $4.8 billion. This is a test of appetite for the AI boom, with results due on May 13.
In this context, "minus 0.7% for Tesla" is not news about Tesla. It's news that the market on Monday morning is pricing in a risk premium for five events at once. And that premium, frankly, is laughably small.
Timeline and Context
Let's lay out the facts chronologically, because the devil is in the sequence.
May 8, 2025 — Sony releases its fiscal year report ending March 2026. Quarterly net profit fell 63% due to a ¥44.9 billion ($286.1 million) write-down on the closure of its electric vehicle project with Honda. But the forecast for the next year: net profit growth of 12.5% to ¥1.16 trillion, gaming operating profit up 30% to ¥600 billion. And crucially: the announcement of a joint venture with TSMC to develop and manufacture next-generation image sensors. CEO Hiroki Totoki stated that Sony's current capacity is limited and the company needs TSMC's partnership to meet future demand for "eyes for machines" in the era of physical AI.
May 10, Sunday — Iran publishes a counterproposal for a peaceful settlement. It demands a ceasefire across the entire region, including Lebanon, compensation for war damages, lifting of the naval blockade, and removal of the ban on Iranian oil exports. Trump responds with a single post on Truth Social: "TOTALLY UNACCEPTABLE." Brent crude rises above $104 per barrel (+2.7%), WTI to $97.55 (+2.3%). The Strait of Hormuz remains virtually closed to commercial shipping.
May 11, 4:30 AM ET — Premarket is red across all mega-cap tech companies. Simultaneously, Sony surges nearly 10% in Tokyo, reaching ¥3,420 per share.
The connection between these events is not just chronological. It's causal.
Who Wins and Who Loses
The paradox of today's premarket is that the loser is the US tech sector as a group, while the winner is a specific Japanese company. But let's dig deeper.
Today's main beneficiary is Sony. Not because of games, not because of movies, but because the company made a perfect strategic move at a moment when the semiconductor industry is frozen ahead of the Trump-Xi summit. The joint venture with TSMC solves a fundamental problem: Sony is hitting a ceiling in image sensor production capacity. Totoki directly said, "We want to be ready for future demand." In the context of agentic AI and physical AI—technologies that require sensors to interact with the physical world—image sensors become a strategic resource no less important than GPUs. And Sony, by securing a partnership with TSMC, guarantees its place in this chain.
Plus, a ¥500 billion ($3.19 billion) buyback. The company is buying its shares after a 23% drop since the start of the year. A classic signal of management confidence.
The losers are US AI companies tied to chip exports to China: Nvidia, AMD, Broadcom. The Trump-Xi summit will specifically discuss semiconductor export controls. Any tightening—and the Chinese market, which contributes a significant share of revenue, shrinks. Institutions are reducing positions not because they believe in a bad outcome, but because the risk asymmetry is not in their favor: the upside potential from good news is limited (the market is already at highs), while the downside potential from bad news is huge.
But the most interesting loser is the retail investor who looks at the red premarket and doesn't understand why Sony is rising while Nvidia is falling. Because the story of this day is not about individual stocks. It's about a macro reversal.
What the Media Isn't Saying
Here begins the layer absent from the morning briefings of Bloomberg and Reuters.
Insight one: The market has begun to reassess the global AI production chain. What we see in the premarket on May 11 is not a one-off reaction to headlines but the start of a structural shift. US companies dominate chip design (Nvidia, AMD) and AI software (Microsoft, Google). But when supply chain volatility increases due to geopolitics, investors start looking at alternative beneficiaries of the AI boom. Sony, with its image sensors for physical AI and its TSMC partnership, is an ideal candidate for capital rotation from US AI into Japanese AI-adjacent sectors. This is not speculation; it's portfolio rotation that could last weeks.
Insight two: The premarket decline is not about oil, but about correlation. Most commentators will link the red premarket to rising oil prices due to the breakdown of talks with Iran. But look at the scale: Brent crude rose 2.7%, while airline stocks United and Southwest fell only 1%. The tech sector lost 0.3-0.7%. This is not an oil reaction. It's a reaction to accumulated uncertainty: the US-China summit, the Fed chair change, CPI, the largest IPO of the year. Each of these events individually is not a reason to sell. But all five in one week—that's a reason to hedge. And the premarket on May 11 is the quiet, methodical hedging of institutional portfolios.
Insight three: Sony has become a proxy for physical AI. The first wave of the AI boom was about GPUs and data centers. Agentic AI—the second wave—requires CPUs and inference chips. But there's a third wave that almost no one writes about: physical AI—robots, autonomous vehicles, drones, industrial systems. They need not only brains (chips) but also eyes (sensors). Totoki's statement about "eyes for machines" and the TSMC partnership positions Sony precisely in this niche. The market understood this instantly: up 10% in a day after a 23% drop since the start of the year.
Forecast: The Next 30 and 90 Days
30-day horizon, until mid-June 2026.
Base case: The US tech sector will remain under volatility pressure at least until the end of this week. The outcome of the Trump-Xi summit in Beijing will determine the direction for Nvidia, AMD, and the entire semiconductor ETF. If the summit ends without new restrictions, we'll see a sharp tech rebound in the second half of the week. If new export quotas are announced, the correction will deepen to 5-7%.
Sony, on the other hand, will continue to rise. The joint venture with TSMC is not a short-term catalyst but a structural revaluation of the company. Analysts will start raising target prices, factoring in future revenues from image sensors for AI. Additionally, the $3.19 billion buyback will support the stock. I expect that by mid-June, Sony's ADS will test the $25-27 level (a 15-20% increase from current levels).
As for the Cerebras IPO on May 13: it will be a barometer of AI appetite. If the IPO prices above the range and the stock surges on debut, it will revive interest in the entire AI sector. If the debut disappoints, tech sector volatility will increase manifold.
90-day horizon, until August 2026.
Here the scenario is more complex. The main factor is the Fed under Warsh. If the April CPI shows accelerating inflation due to the energy shock, Warsh will start his term with a hawkish stance. That means no rate cuts before October-November, possibly even hints of another hike. For the tech sector, which is highly leveraged and valued on multiples of future earnings, this is a toxic scenario. The market capitalization of tech companies could shrink by 10-15% over the summer.
But Sony in this scenario is a relative winner. The company trades at significantly more modest multiples than US tech giants. Its P/E is below 20, the business is diversified (games, movies, music, sensors), and the buyback adds marginal support. The Japanese market also benefits from a weak yen, providing a currency tailwind for exporters like Sony.
The most interesting question is how long the divergence between US and Japanese tech sectors will last. My hypothesis: we are at the beginning of a medium-term trend where AI investors begin to diversify geographically, moving away from concentration in US names alone. Sony is just the first, most visible example. Others will follow: Japanese and Taiwanese companies embedded in the global AI chain.
Risk scenario for my forecast: if the Trump-Xi summit ends with a breakthrough (complete removal of export restrictions, normalization of tech trade), the US tech sector will surge 5-7% in a day, and all my calculations about a "structural shift" will become obsolete. But honestly, I haven't seen a single analyst report that factors in such an outcome as likely.
The main lesson of the May 11 premarket: when the market simultaneously prices in the risks of five catastrophes and none of them occur, it's the best time to buy. When the market prices in the risk of only one catastrophe and three occur, it's the best time to hold cash. Right now, we're somewhere in between. I wouldn't rush.
— Editorial Team
