After over a month of elevated oil prices and rising U.S. Treasury bond yields, the AI sector started to fall.
Shares of Nvidia (NVDA), Oracle (ORCL), CoreWeave (CRWV), and Nebius (NBIS) sank. Both CRWV and NBIS shares fell in the 7% range. Oracle (ORCL) fell by 5.5%, while Nvidia fell the least at -2.94%.
OpenAI, which already announced that it would delay its IPO until 2027 at the earliest, reported annualized revenue of $50 billion at the end of last month. That is nearly $20 billion, or nearly 30%, below the $68 billion that the firm first reported. The chatbot supplier included gross revenue from its partners.
OpenAI included partner figures so that it could provide markets with a more similar comparison to Anthropic.
The report is troubling. If Microsoft (MSFT) and its partners are including the revenue, then markets are double-counting the revenue.
Relative trading volume in the tech sector was over one times as Nasdaq (QQQ) dropped by 1.25%. Chip stocks like Broadcom (AVGO), Intel (INTC), AMD (AMD), Micron Technology (MU), and Marvell (MRVL) traded lower.
Investors piled into consumer defensive firms like Coca-Cola (KO), Walmart (WMT), and Pepsi (PEP). Energy firms including ConocoPhillips (COP), Chevron (CVX), and ExxonMobil (XOM) traded up by around 3%.
Investors wary of AI-related names fell back and diversified into sectors that offered better value. Home Depot (HD) and Lowe's (LOW) gained 3.4% and 4%, respectively.
