Tech stocks slip as OpenAI growth disappoints and Nvidia earnings loom

Technology shares retreated in early trading on Thursday, with the Nasdaq index down 0.82 per cent following a modest rebound on Wednesday. The pullback was driven primarily by a reaction to OpenAI’s latest financial results, which failed to meet investor expectations. According to The Wall Street Journal, the company reported second-quarter revenue of US$6.7 billion, representing an 18 per cent increase from the previous quarter. This growth rate was viewed as underwhelming by the market, particularly when contrasted with reports from rival Anthropic, which Bloomberg claims saw its preliminary quarterly revenue surge 14-fold to US$11.5 billion from US$787 million a year ago.

The next significant test for the artificial intelligence trade is scheduled for 26 August, when Nvidia is set to report its quarterly earnings. This announcement is expected to have a wide-ranging impact on hyperscalers and other companies within the AI supply chain. In the interim, the sector is seeing continued movement in hardware and infrastructure. Cerebras unveiled its CS-4 rack-scale system, claiming it offers 30 times the tokens per second per user compared with graphics processing units. The system utilises wafer-scale processors designed for AI inference, leveraging static random-access memory to reduce data travel distances.

In a major infrastructure development, Nvidia, OpenAI, and SB Energy announced plans for an eight-gigawatt data centre facility in Ohio, known as the PORTS-Pike Technology Campus. Nvidia will provide up to US$105 billion in financing to secure the land, power, and shell for the site, which OpenAI will lease for 20 years. The complex is designed to exclusively use Nvidia GPUs, with potential revenue for each generation deployed through 2030 estimated between US$150 billion and US$200 billion. Nvidia CEO Jensen Huang stated in a blog post that the arrangement does not constitute circular investing, emphasising that the company is securing critical inputs based on long-term visibility into customer demand.

Legal and competitive pressures continue to weigh on other major tech names. A trial in Oakland, California, continued regarding a lawsuit by 29 state attorneys general alleging that Meta designed its platforms to harm children’s mental health. The trial, which involves attorneys general from California, Colorado, Kentucky, and New Jersey, is serving as a bellwether for the broader suit. Meta’s legal team has argued that the company has taken steps to protect teen users, while the plaintiffs claim Meta knowingly developed psychologically manipulative features to maximise user engagement.

SpaceX shares also faced pressure, slipping after a new share unlock made 319 million shares eligible to trade. This structural change coincided with competitive news from China, where startup LandSpace successfully landed the first stage of its Zhuque-3 rocket on a pad in the Dongfeng Commercial Space Innovation Pilot Zone. This marks the first time a Chinese company has recovered an orbital-class booster on land, adding to the competitive landscape for the US space sector.

Further developments in the chip market include a deal between Marvell and Google, where Marvell will produce custom chips for Google’s Tensor Processing Unit ecosystem, including AI inference accelerators. Marvell also offered Google the opportunity to purchase up to US$12.1 billion in stock warrants, a move that has raised concerns among experts about circular financing potentially inflating chip sales. Despite these concerns, the news sent Marvell’s stock up more than seven per cent, while Micron shares crossed the US$1,000 level in premarket trading on Monday, driven by strong demand from hyperscalers.