(Bloomberg) — A constellation of artificial-intelligence stocks dropped after OpenAI reportedly failed to meet its sales and user targets, rekindling doubts that the hundreds of billions of dollars that big companies are plowing into the technology will deliver sufficient profits anytime soon.<\/p>\n
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The report dragged down the stocks of companies that have cut investment and business deals with OpenAI, which helped unleash the stock-market\u2019s AI boom after the release of ChatGPT more than three years ago.<\/p>\n
Shares of Oracle Corp. and CoreWeave Inc., which have cloud-computing pacts with OpenAI, closed 4.1% and 5.8% lower, respectively. Chipmaker Advanced Micro Devices Inc. shares fell 3.4% and Nvidia Corp. stock fell 1.6% in its worst day in about a month. Both companies also have ties to OpenAI.<\/p>\n
The reported miss by OpenAI revived worries that have shadowed the stock market periodically for months as technology giants like Microsoft Corp., Meta Platforms Inc., Amazon.com Inc. and Alphabet Inc. invest heavily in AI and stocks have rallied on the back of it.<\/p>\n
Those investments \u2014 as they boosted the revenues of semiconductor, power and data-center companies \u2014 have sown fears that tech stocks could come tumbling back down if the spending halts or windfall profits don\u2019t appear.<\/p>\n
While those concerns were shunted aside after the Iran war sent stocks sliding, the Nasdaq 100 Index rallied back to record highs this month after one it its strongest advances in over a decade. The index dropped about 1% Tuesday. An index of semiconductor stocks \u2014 which had surged 47% from late March through last week \u2014 shed 3.6%.<\/p>\n
\u201cWhat we\u2019ve seen in this market is like the maximum reaction,\u201d said Brian Mulberry, chief market strategist at Zacks Investment Management. \u201cWe automatically price in the worst case scenario or the best case scenario.\u201d<\/p>\n
OpenAI\u2019s Chief Financial Officer Sarah Friar has told leaders internally that she is worried the firm might not be able to pay for future computing contracts if revenue doesn\u2019t grow fast enough, the Wall Street Journal reported, citing people familiar with the matter. An OpenAI spokesperson said the company is \u201cfiring on all cylinders\u201d and seeing strong growth in demand from enterprise customers and for its nascent advertising business.<\/p>\n
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The stock price moves on Tuesday weren\u2019t outsized by recent standards. But the report comes ahead of earnings reports from big tech companies like Alphabet, Microsoft., Meta and Amazon.com, all of which will provide an update on AI rollouts.<\/p>\n
\u201cThere\u2019s still a fair bit of nervousness around the exposure of the entire chip and data center and software supply chain to the big players,\u201d said JoAnne Feeney, a portfolio manager at Advisors Capital Management. \u201cAny bit of news that comes out is going to make people pause and reassess and wonder at the risks they may not have been considering.\u201d<\/p>\n
Bloomberg Intelligence analyst Anurag Rana said OpenAI\u2019s struggles could \u201chave an impact throughout the entire AI infrastructure ecosystem, with Oracle as the most exposed in terms of risk to its financial goals.\u201d<\/p>\n
\u201cMicrosoft, Amazon Web Services and CoreWeave could also feel some impact if OpenAI decides to pull back its computing needs,\u201d he said.<\/p>\n
While OpenAI had an early advantage in the AI business, competition has been fierce, with upstart rivals like Anthropic making major headway and the big companies mounting their own major pushes into it as well. That has aided companies like CoreWeave that aren\u2019t tied just to OpenAI.<\/p>\n
OpenAI is \u201cnot our only\u201d partner, a CoreWeave spokesperson said in an email, adding that the company\u2019s business is supported by other customers like Meta, Anthropic, Microsoft, Google and Perplexity AI.<\/p>\n
An Oracle spokesperson said that the company is \u201cincredibly excited\u201d about its partnership with OpenAI and is focused on \u201cbuilding and delivering the capacity they need to support rapidly growing demand.\u201d<\/p>\n
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OpenAI, once at the forefront of the artificial intelligence frenzy, fell short of several monthly sales targets in 2026 after rival Anthropic gained ground in the coding and enterprise markets, the Journal reported Monday, citing unidentified people familiar with the matter.<\/p>\n
Perceptions about OpenAI\u2019s leadership shifted last fall after Alphabet\u2019s Gemini AI model and Anthropic\u2019s Claude received broad acclaim. These updates from consumer and business-focused rivals have sparked repeated selloffs in companies considered proxies for OpenAI.<\/p>\n
\u201cGoogle for a while was being perceived as a bit of a loser, because their models were maybe not as good as what we were seeing coming out of OpenAI and Anthropic,\u201d Tiffany Wade, senior portfolio manager at Columbia Threadneedle Investments said in an interview with Bloomberg Television. \u201cThat changed last year when they released some of their newer Gemini models and were seen as more of a winner.\u201d<\/p>\n
Wade added that while the investor reaction to the OpenAI news makes sense, especially given tech and semiconductor stock gains in April. She said expectations about the longer-term demand for AI-related infrastructure remains intact.<\/p>\n
\u201cThere is so much demand and it\u2019s not just from Anthropic and OpenAI,\u201d she said. \u201cIt\u2019s really across the economy that we\u2019re seeing demand for more processing power, so I expect the spending is going to continue.\u201d<\/p>\n
–With assistance from Seth Fiegerman, Dana Wollman, Lynn Doan, Ruhell Amin, Ed Ludlow and Caroline Hyde.<\/p>\n
(Updates stock moves at market close.)<\/p>\n
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