In one night, OpenAI's revenue caused a pullback in AI stocks

Source: BIT Securities
Last night, AI trading encountered a wave of indiscriminate selling.

The two leading sectors recently—storage chips and optical communications—collectively crashed overnight: SanDisk and SK Hynix fell over 9%, Micron dropped more than 7%, Coherent and CoreWeave plummeted over 12%, Nebius fell over 7%, and nearly all companies related to the AI narrative also experienced declines, unable to escape unscathed.

The trigger for all this was OpenAI's Q2 revenue.

1. OpenAI's Report Card: Growth Fails to Keep Up with Valuation

OpenAI disclosed its second-quarter data to investors, showing that quarterly revenue rose from $5.7 billion to $6.7 billion, a quarter-on-quarter increase of 18%.

A revenue figure close to $7 billion in a single quarter is impressive for any startup. However, OpenAI's situation is unique—boasting a sky-high valuation, with financing plans and IPO expectations behind it, the market's demands have never been "good," but rather "stunning." An 18% quarter-on-quarter growth has led some investors to reassess the alignment between its growth and valuation.

What truly raised concerns in the market was the loss side. The operating loss in the second quarter expanded from $9.3 billion to $12.3 billion, with the bleeding rate outpacing revenue growth. Since this figure includes stock-based compensation expenses, the company appears even further from its profitability goals, prompting investors to reevaluate its financial path before going public.

In summary, the report card indicates: revenue is rising, but not fast enough; the hole is widening, and it's widening faster.

2. Macroeconomic Variables

In addition to company-specific negatives, the macro environment also saw changes at the same time.

The first comes from the bond market. The sell-off in U.S. Treasuries accelerated, with the 30-year Treasury yield climbing to around 5.3%, setting a new record since 2007. Treasury yields serve as the anchor for financing costs across the market—when the anchor rises, the interest on corporate bonds must also increase, putting more pressure on companies that rely on debt to support R&D investments.

The second comes from macro expectations. This month's Jackson Hole global central bank annual meeting marks the first public appearance of the new Federal Reserve Chair, Waller. The market is uncertain about his policy tone and has opted to hedge in a "hawkish" direction. Additionally, the U.S.-Iran ceasefire agreement is set to expire at this time, leading to a recent spike in oil prices and rising inflation expectations.

3. The Nature of the Market Has Changed

Putting together the company and macro perspectives, the logic behind last night's decline becomes clear: the AI narrative remains the main theme in U.S. stocks in the short to medium term, which no one denies; however, the phase of "anything you buy goes up" has come to an end.

The characteristics of the upcoming market will be very distinct—high-profile sectors like storage chips and optical modules will see significant volatility in response to sudden news. A piece of financing news, a report of unexpected losses, or a Treasury auction with soaring yields could all lead to daily swings of 10%.

For risk-averse funds, following Buffett's allocation and buying established giants like Google remains a more prudent option: solid cash flow, no overextended valuations, and AI investments that can directly connect to existing commercial outlets.

4. Contrarian View: Bank of America Believes Nvidia is Undervalued by Up to 50%

Notably, amidst the panic, some institutions are firmly bullish.

Bank of America analyst Vivek Arya stated in a recent report that the market may currently be overestimating the risks facing the AI investment cycle, suggesting Nvidia's valuation could be undervalued by 34% to 50%. He reaffirmed a "buy" rating and maintained a target price of $350.

Arya acknowledged that the overall pressure on AI concept stocks has its background—investors are continuously worried about a slowdown in AI infrastructure investment, the progress of corporate AI commercialization, and high valuation pressures. However, Bank of America's judgment is that the market's pricing of these risks has gone too far. Nvidia still occupies a core position in AI computing infrastructure, with GPU product strength, software ecosystem barriers, and deep collaborations with cloud providers collectively underpinning its continued benefit from growing demand for computing power. The market's doubts about the sustainability of the AI cycle have instead obscured the company's long-term growth potential.

5. In Conclusion

Last night's broad decline was essentially a market re-evaluation of the AI narrative: OpenAI's financials indicate that cash burning is far from over, the 5.3% Treasury yield suggests that funds are no longer cheap, and Bank of America's report indicates that the panic itself may also be mispriced.

These three forces will repeatedly contend in the upcoming market, and volatility will become the norm. For investors, the AI train has indeed passed the stage where one can sit with their eyes closed.

Disclaimer: This article is written by an external author, and the information, opinions, analyses, and judgments contained herein represent the author's personal views and do not represent the position, views, or investment advice of BIT. This article is for general information and investor education purposes only and does not constitute any investment advice, investment recommendation, trading commitment, or profit guarantee regarding securities, digital assets, or other financial products. The market data, institutional views, valuations, and target prices mentioned are for reference only and may change with market conditions. BIT does not guarantee the completeness, accuracy, or timeliness of this information. Investing involves risks, and market prices may experience significant fluctuations. Investors should make independent judgments and decisions based on their own circumstances.