Cracks in the OpenAI Spending Story Develop Ahead of Major Earnings

Stock index futures are indicating a weak open on Tuesday morning with semiconductors leading the pressure. Rambus (RMBS) and Marvell Technology (MRVL) are notably weak in pre-market trading and the broader Semiconductor ETF (SMH) is giving back some of Monday's gains after another strong session. Oil is trading higher again and the dollar is firm.

The catalyst for the pressure is a Wall Street Journal report that OpenAI has missed its internal targets for both new users and revenue. The company fell short of its goal of one billion weekly active ChatGPT users by the end of 2025 and missed multiple monthly revenue targets earlier this year. The report cited losses to Anthropic in coding and enterprise markets.

The Spending Question

The story that is spooking the market this morning is that CFO Sarah Friar told other executives she is worried OpenAI may not be able to pay for future compute contracts if revenue does not grow fast enough. The board has been scrutinizing Sam Altman's data center deals and questioning his push to lock up even more computing power despite the slowdown.

Altman and Friar issued a joint statement dismissing the concerns, saying they are aligned on buying as much compute as possible. The issue is now on the radar, however, and is hitting names like Oracle (ORCL) , which is indicated down around 4.5%.

OpenAI has pledged roughly $1.5 trillion in data center, GPU, and memory spending. Any signal that those commitments may be trimmed will hit the suppliers first. Rambus and Marvell are the early read on that, and any extension of the selling to Nvidia (NVDA) , Micron Technology (MU) , and Broadcom (AVGO) will tell us how much weight the market is giving the story.

Walking Into the Buzzsaw

The timing is what makes this interesting. The FOMC meeting begins today with the decision Wednesday afternoon. Microsoft (MSFT) , Google (GOOGL) , Meta (META) , and Amazon (AMZN) report Wednesday after the close, and Apple (AAPL) follows Thursday. Commentary about capex from those calls was already going to be the most scrutinized part of this earnings season. Now it has a fresh question attached to it.

Watch how the chip group trades into the open. A quick reversal would suggest dip buyers are still in control. A drift lower through the morning would tell us the OpenAI story is being treated as something more than a one-day headline.

My Strategy

My game plan is to increase caution about holding positions into earnings reports. The risk of negative reactions is building, and a good report may not be enough to prevent a "sell the news" reaction.

One stock that I've discussed previously, Solaris Energy Infrastructure (SEI) , had a great report Monday night but is already well off its overnight highs. If a report like that in the AI energy sector is sold as it hits new all-time highs, then there will be high levels of risk for other names leveraged to AI.

My goal is to keep accounts as close to highs as possible. The risk of holding big positions into earnings reports is too high in most cases.

At the time of publication, Rev Shark was long GOOGL, NVDA and SEI.