OpenAI reportedly said that it had clocked about $50 billion in annualized revenue at the end of September, while markets were widely expecting a revenue figure of $70 billion.
- Technology and chip stocks slumped on the news from OpenAI.
- Nicholas Mugalli, an institutional TMT research analyst, said in a post on X that the market was repricing based on rumors.
- SpaceX also said on Thursday that it had agreed to buy up to 14 megahertz of paired spectrum in the 800 MHz band, putting Starlink Mobile on track to compete as a major U.S. mobile carrier.
U.S. stock futures climbed overnight late Thursday, after an underwhelming revenue report from OpenAI sparked a selloff in technology and chip stocks at the close.
As of 10:58 p.m. EDT, Dow futures were up about 0.23%, the S&P 500 futures gained 0.28% and the Nasdaq-100 futures climbed 0.36%.
On Thursday, the three benchmark indexes closed mixed. The Nasdaq Composite shed 345 points to close 1.25% lower, while the S&P 500 closed 0.47% lower. The Dow Jones Industrial Average rose 0.10%.
| Index | Move | Close |
| Dow Jones Industrial Average | 0.10% | 51,231.64 |
| S&P 500 | -0.47% | 7,765.36 |
| Nasdaq Composite | -1.25% | 27,193.34 |
For the week, all three benchmark indexes are on track to close higher, though Thursday’s Nasdaq slump has left the index flat for now.
Key US Market Drivers
Technology and semiconductor stocks dominated the market on Thursday, but the sector slipped at close after OpenAI disclosed weaker-than-expected revenue.
OpenAI reportedly clocked about $50 billion in annualized revenue at the end of September, while markets widely expected $70 billion as of last month.
OpenAI’s annualized revenue comparison with Anthropic sparked confusion because Anthropic counts sales through cloud partners such as Amazon Web Services and Google Cloud, while OpenAI does not. The $70 billion figure, first reported by Axios, included partner revenue to enable a more direct comparison.
Shares of Nvidia Corp. (NVDA) slid nearly 3% at close, while Oracle Corp. (ORCL), Broadcom Inc. (AVGO), and Advanced Micro Devices Inc. (AMD) fell about 5%, 4%, and 4%, respectively.
Nicholas Mugalli, institutional TMT research analyst, said in a post on X that the market was repricing based on rumors. “If you’re an AI bear and using this as a “win” already…I’ve got a bridge to sell you!! The $70 billion was a reported number OpenAI never confirmed, and the real figure is still a company approaching $50 billion annualized.”
He highlighted that at the end of last year, the run rate was around $20 billion, indicating roughly 2.5x growth in nine months. “That's not a miss by any metric…that's expectations running ahead of the fastest scaling company we've ever seen. Not to mention Anthropic is already at close to $100B ARR.”
Mugalli also said that the AI trade was not built solely on OpenAI's revenue, but on other hyperscalers like Microsoft Corp. (MSFT), Alphabet Inc. (GOOG, GOOGL), Amazon.com (AMZN) and Meta Platforms (META) spending hundreds of billions dollars out of their own cash flow, with “every one of them has been saying demand outruns capacity.”
“So one private company's revenue mark doesn't cancel a datacenter order book. If it could, the thesis was never real to begin with…What would actually break it is if capex guidance get cuts, GPU lead times collapsing, or enterprise adoption stalling. None of that happened today and not going to happen for the next 5 years. The market repriced a rumor, and rumor driven selloffs are usually where patient money gets paid. Thesis intact…limit up!” he said.
The telecom sector was also in focus after SpaceX (SPCX) said it had agreed to buy up to 14 megahertz of paired spectrum in the 800 MHz band, putting Starlink Mobile on track to compete as a major U.S. mobile carrier.
Shares of other telecom companies including AT&T Inc. (T), T-Mobile US (TMUS), Verizon Inc. (VZ) and Comcast (CMCSA) sank following the announcement.
Meanwhile, investors are gearing up for the third-quarter earnings season next week, which starts with major U.S. banks reporting results.
Trending Stocks To Watch
Nebius Group N.V. (NBIS): Shares of the neocloud provider climbed more than 2% in the overnight session late Thursday after Rosenblatt initiated coverage of the company with a ‘Buy’ rating and a $304 price target.
AT&T Inc. (T): The company’s stock plunged more than 6% in the overnight session after SpaceX said it had agreed to buy a nationwide low-band spectrum portfolio.
SpaceX (SPCX): The Elon Musk company was on retail radar after announcing that Starlink Mobile would soon compete as a major U.S. mobile carrier following its purchase of low-band spectrum portfolio assets.
Verizon Communications Inc. (VZ): This telecommunications company’s shares plummeted nearly 6% overnight on fears of competition from SpaceX.
Other Market Trends
Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY), the SPDR Dow Jones Industrial Average ETF Trust (DIA) and the Invesco QQQ Trust (QQQ) all climbed at the time of writing, with sentiment in the green.
U.S. long-dated Treasury yields caught a break, sliding lower from multi-decade highs. At the time of writing, the 10-year U.S. Treasury yield was 5.234%, and the 30-year Treasury bond yield was 5.612%.
The iShares 20+ Year Treasury Bond ETF (TLT) was down 0.10% amid ‘bullish’ sentiment.
Meanwhile, oil prices edged lower at the time of writing, although they continued to trade over $100 a barrel. Brent crude futures expiring in December were trading at $103.45 a barrel, while WTI crude futures expiring in November traded at $90.81 per barrel.
Asian markets opened mixed on Friday. South Korea's KOSPI, Japan’s Nikkei 225 and China’s SSE Composite were down at the time of writing, while Australian stocks were up at the open.
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