All the US majors lost ground yesterday. The small-cap Russell 2000 led the decline, ending down 1.2%, while the tech-heavy NASDAQ dropped 0.9%. There was a sharp pullback across semiconductor stocks following an incredible bull run.
Source: TN Trader
But technology stocks tied to AI also took a hit following concerns that privately-owned OpenAI was losing market share. New user growth and sales were below the company’s targets. OpenAI’s CFO, Sarah Friar, warned that the company may struggle to meet computing contract obligations if top-line growth does not accelerate.
After last night's close, Starbucks jumped over 5% after raising its full-year outlook. But Robinhood dropped 10% on disappointing numbers. Chip sector names Seagate Technology and NXP Semiconductors were up 17% and 15%, respectively, following earnings beats and strong guidance.
All eyes will now focus on results from Alphabet, Amazon, Meta Platforms and Microsoft due after tonight’s close. Forward guidance will be key here, and analysts will be looking for confirmation that AI-related spending is translating into revenue.
