Wall Street’s artificial intelligence rally hit a stumbling block on Thursday after a report that OpenAI’s revenue growth is running well behind what investors had been told. The Nasdaq Composite, heavy with technology and AI-linked stocks, fell more than 1% to close at 27,193.34, its steepest one-day drop since mid-August, according to CNBC.
The Financial Times reported, citing financial documents shared with investors, that OpenAI’s annualized revenue was about $20 billion lower than previously signaled. The company’s revenue run-rate reached roughly $50 billion as of September, the report said, well short of the approximately $70 billion figure that had circulated earlier.
Chipmakers and cloud providers take the hit
The reaction rippled quickly through companies tied to OpenAI’s infrastructure spending. Oracle shares fell more than 5%, while Nvidia lost nearly 3% and Advanced Micro Devices dropped almost 4%, CNBC reported. Bitcoin mining stocks also slid, caught up in broader unease about AI-sector spending plans and a weaker bitcoin price.
The S&P 500 declined 0.47% to 7,765.36. The Dow Jones Industrial Average, less exposed to the tech sector, bucked the trend and rose 51.77 points, or 0.1%, to 51,231.64. Rising Treasury yields and elevated oil prices had already weighed on equities earlier in the week, with investors wary that persistent inflation could push the Federal Reserve toward further rate increases.
SpaceX spectrum deal unsettles telecom stocks
A separate development added to the day’s turbulence. SpaceX announced a definitive agreement to acquire all of Grain Management’s nationwide 800 MHz spectrum portfolio, described in a company statement as up to 14 megahertz of paired spectrum. The deal, reported by the Wall Street Journal to be worth about $8 billion, is meant to help SpaceX’s Starlink Mobile service grow into a major US mobile carrier, pending approval from the Federal Communications Commission.
Shares of AT&T, Verizon and T-Mobile all fell on investor concern over new competition, while SpaceX’s own valuation moved higher, with CNBC reporting an approximate 4% gain and MarketScreener putting it at 3.6%. The deal’s ripple effects were not confined to the United States: broader telecom stocks in Europe also slid as investors weighed the prospect of a low-band spectrum challenger entering mobile markets more widely.
SpaceX described the acquisition as covering ‘a license portfolio of up to 14 megahertz of paired spectrum in the 800 MHz band.’
Markets steady into Friday
Despite Thursday’s losses, US stock futures rose Friday morning, led by technology shares, with Nasdaq-100, S&P 500 and Dow futures all higher. Asia-Pacific markets closed mostly higher too: Japan’s Nikkei 225 was little changed at 69,030.92, the Topix gained 0.33% to 4,104.81, and Australia’s S&P/ASX 200 rose 0.64% to 8,716.6, according to CNBC.
The Nasdaq’s pullback followed a week in which the index had climbed to fresh record highs, underscoring how sensitive AI-linked valuations remain to any sign that spending or revenue projections for the sector are less robust than advertised.
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