Nvidia closed at a record high on Monday, up 4%, capping an 18-day winning streak for the iShares Semiconductor ETF. Tuesday had a different feel.
Premarket on Tuesday, Nvidia was down 3.4% to $209.28. The drop came after the Wall Street Journal reported that OpenAI missed internal targets for weekly active users and monthly revenue in 2026.
The selloff spread fast. AMD fell 6%, Arm dropped 8%, Broadcom slid 5%, Intel and Micron each lost around 4%, and Applied Materials dropped 3.4%.
Nvidia, AMD, and Broadcom all hold supply deals with OpenAI. Nvidia also invested $30 billion in OpenAI’s latest funding round, after scaling back an earlier commitment of up to $100 billion.
The Journal cited people familiar with the matter who said OpenAI CFO Sarah Friar warned company leaders that the business may not be able to cover future computing contracts if revenue doesn’t pick up quickly enough.
Board members have been taking a closer look at OpenAI’s data center deals and questioning CEO Sam Altman’s push to lock in more computing power, according to the same sources.
Altman and Friar issued a joint statement calling any suggestion they are divided or pulling back on compute “ridiculous.” OpenAI separately told the Journal it is “buying as much compute as we can.”
OpenAI did not respond to Barron’s request for comment by early Tuesday.
The company’s struggles have been linked partly to rising competition. Anthropic gained ground in coding and enterprise markets, while Google’s Gemini model received broad acclaim last fall. Both have triggered repeated selling in stocks seen as proxies for OpenAI’s success.
The chip sector had already run hard. The Philadelphia Semiconductor Index rose nearly 50% from its March 30 low. Some analysts saw Tuesday’s move as overdue profit-taking.
“This morning’s moves in individual stocks indicated some profit-taking across semiconductors, which seems reasonable given their incredible run since the end of March,” said David Morrison, senior market analyst at Trade Nation.
Now all eyes shift to Wednesday’s earnings. Alphabet, Microsoft, Amazon, and Meta are all reporting. Combined, the largest U.S. tech companies are expected to confirm more than $700 billion in capital expenditure for 2026.
That number matters. Chip stocks live and die on AI infrastructure spending. If those capex commitments hold, it could calm nerves quickly.
Arm Holdings was the hardest hit Tuesday, down 8% in premarket trading.
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