S&P futures experienced a modest uptick on Friday, primarily driven by the technology sector, after a previous session marked by a disappointing revenue report from OpenAI that dampened enthusiasm in the robust artificial intelligence market. Nasdaq-100 futures increased by 0.8%. S&P 500 futures increased by 0.4%, whereas Dow Jones Industrial Average futures rose by 82 points, equivalent to 0.2%. The State Street Technology Select Sector SPDR ETF traded 1% higher, driven by a 4% increase in SpaceX.
The space and satellite company led by Elon Musk experienced an increase following an agreement to acquire a nationwide spectrum portfolio. Shares of AT&T, Verizon, and T-Mobile declined as investors expressed concerns that the agreement might intensify competition. AI stocks experienced a decline on Thursday following confirmation that OpenAI informed investors of an anticipated $50 billion in annualised revenue by the end of September. Last month, a $68 billion figure was widely reported; however, a source familiar with the matter indicated that this amount also encompassed gross revenue from partners.
The Nasdaq Composite experienced a decline exceeding 1%, representing its most significant single-day decrease since mid-August. Thursday represented the second consecutive decline for the tech-heavy index, following its ascent to new all-time highs earlier in the week. “The sell-off reflected extreme positioning imbalances that have further to unwind in our view, which is why the whole AI-linked tech stock complex is unlikely to simply stage a sharp, V-shaped rebound,” wrote Adam Crisafulli.
“When it comes to AI, the main issue isn’t the gross vs. net issue with [annualized recurring revenue] but instead: 1) the fact that the standalone frontier labs are increasingly unattractive businesses … and 2) growing signs that markets are pushing back on the tidal wave of AI-linked debt and equity being thrown at them,” he added. The Dow and Nasdaq Composite are both approximately unchanged week to date. The broad S&P 500 is poised to achieve a weekly gain of 0.6%.
