Technology stocks slumped on Thursday after the Financial Times reported that OpenAI’s revenue is running well below earlier public estimates. The S&P 500 declined 0.8% and the Nasdaq 100 lost 1.6%, while the Dow hovered just below unchanged. According to documents cited in the report, OpenAI’s annualized revenue is about $50 billion, compared with prior estimates of $70 billion. The disclosure revived worries about the profitability of large language model developers and the durability of the massive AI infrastructure spending that has been a key driver of both equity markets and US GDP growth this year.
Nvidia dropped 3%, and shares of Broadcom, SpaceX–linked plays, AMD, Intel, and Arm fell between 4% and 8%. At the same time, energy prices softened after President Trump signaled that the United States would not launch a strike on Iran before the midterm elections, helping to cool the recent surge in long-dated Treasury yields. In a defensive rotation, consumer staples and payment processors staged a rebound, with Walmart, Visa, and Mastercard each rising more than 2%.
