A selloff in technology giants dragged down stocks as concerns resurfaced over whether vast investments in artificial intelligence will pay off just as traders gear up for a slew of megacap results.
The industry that’s powered this month’s equity rally got hit on a news report that OpenAI failed to meet its own goals for new user acquisition and sales, fuelling internal concerns the firm may struggle to support its artificial intelligence infrastructure spending.
Partners such as Oracle Corp. and CoreWeave Inc. slumped, with the S&P 500 dropping from a record. The Nasdaq 100 lost about 1.5%.
OpenAI missed several sales targets after rival Anthropic PBC gained ground in the coding and enterprise markets, the Wall Street Journal reported.
Stocks remained lower even as the ChatGPT creator pushed back against those concerns, saying its consumer and enterprise businesses are “firing on all cylinders.”
That all came as big techs representing about a quarter of the S&P 500’s value get ready to release their earnings. Alphabet Inc., Microsoft Corp., Amazon.com Inc. and Meta Platforms Inc are set to report Wednesday, followed by Apple Inc. a day later.
Any misstep involving AI-related demand or capital budget expenditures could easily give the market second thoughts about how far it has run in the past month, according to Dennis Follmer at Montis Financial.
“The most important question for investors is whether the AI train can keep driving the market forward,” he said.
