OpenAI Missed Revenue Targets, Report Sends Tech Stocks Plummeting
A Wall Street Journal report revealed that OpenAI recently missed its own targets for new users and revenue, raising investor concerns about the firm's ability to justify massive AI spending. The news triggered sharp declines across tech stocks, particularly semiconductors and cloud providers.
OpenAI Revenue Miss
Oracle — The software giant dropped more than 5% after The Wall Street Journal, citing people familiar, reported OpenAI recently missed its own targets for new users and revenue, raising concerns the company may not be able to support its massive AI spending.
Broader Tech Selloff
The S&P 500 and Nasdaq Composite fell on Tuesday, weighed down by a report that pointed to weakness in OpenAI as well as a rise in oil prices. While the broader Nasdaq Composite (-1.39%) is facing some steep declines, the Nasdaq-100 is (-1.49%) is doing one worst, with just 37 of the index's holdings in the green today. Unsurprisingly, semiconductor, software, and hardware stocks are to blame.
Market Concern
CFO Sarah Friar told leadership she was concerned OpenAI may not be able to pay computing contracts in the future if its top line doesn't expand fast enough, the Journal said.
Winners and Losers
General Motors — Shares popped more than 5% after the automaker raised its 2026 guidance and blew through first-quarter earnings expectations, with adjusted earnings of $3.70 per share, above the $2.62 expected by analysts polled by LSEG.