Markets
markets
Luke Kawa

It sucks to be close to OpenAI right now

There’s a common thread between what’s ailing some different parts of the AI trade right now:

A high-profile relationship with OpenAI is a millstone around your neck. The ChatGPT maker is seemingly getting bested by Google’s Gemini 3 (and knows it) while burning a lot of cash, with no end to the red ink in sight.

Such millstone-afflicted parties include:

  • Investing conglomerate SoftBank has tumbled 9.9% and 10.8% in its two most recent trading days in Japan. SoftBank is a useful way to express a view on how OpenAI is doing because the Masayoshi Son-led firm is poised to own about 11% of the company, and increases in its valuation have been a big driver of SoftBank’s growth in net income. SoftBank sold its entire $5.8 billion stake in Nvidia in October, likely to finance what it owes OpenAI to build its position in that privately held company.

  • Oracle has the dubious distinction of getting battered across two different asset classes thanks to OpenAI. Remember: traders loved Oracle’s massive cloud-revenue backlog in the abstract. When the specifics were revealed and much of that sales pipeline was down to a $300 billion deal with OpenAI, that was when the stock peaked. More recently, credit default swaps tied to Oracle’s debt have also widened significantly, as the company’s infrastructure build-out is launching to fulfill demand from OpenAI, a customer that’s considered to be significantly less creditworthy.

  • The AI chip business of Advanced Micro Devices had a major breakthrough in October, securing a deal to sell multiple generations of its flagship GPUs for “tens of billions” in revenue. But... OpenAI was once again the customer. This was quickly followed by a separate announcement that 50,000 of its AI chips would be deployed in data centers run by Oracle starting in the second half of next year, likely de facto representing a further enmeshing of its relationship with OpenAI.

  • Microsoft has a tighter partnership with and bigger equity position in OpenAI than SoftBank. On the other hand, it also has its own successful core business, which significantly dilutes any OpenAI “signal,” so to speak. It’s the second-worst publicly traded hyperscaler in November, down almost double digits and trailing only Oracle.

More Markets

See all Markets
Tasha Matsumoto
6/5/26
Stocks tumble amid AI sell-off as a blowout jobs report dampens hope of a rate cut this year

The S&P 500 broke its streak of nine consecutive weekly gains, while the Nasdaq 100 had its worst day since April 2025.

Yellowstone: America's First National Park
Dickens, Great Expectations, He said, Aha! would you?

Tech tumbles as momentum stocks run into a blowout jobs report and a wave of profit-taking

The AI trade is under some pressure, taking prices back like... a few days. President Donald Trump is not a fan of the price action.

David Crowther6/5/26
Trump Administration Considers Reclassifying Marijuana As A Less Dangerous Drug

Trulieve to list on NYSE, a first for US cannabis sector

More may be on the way: several other US cannabis companies have announced reverse stock splits with the intention of listing on a major exchange.

J. Edward Moreno6/5/26
markets
Helena Cheng

Lululemon’s stretch getting tested: Stock plunges after after outlook is cut

Lululemon shares are down double digits in premarket trading after the company cut its full-year sales and profit outlook, overshadowing a Q1 beat and raising fresh concerns about the brand’s turnaround efforts.

The company now expects fiscal 2026 revenue to be flat to down 1%, compared with its prior forecast for 2% to 4% growth. Guidance for full-year diluted earnings per share was dragged down to a range of $10.95 to $11.15, below the company’s previous guidance of $12.10 to $12.30 and well below Wall Street’s estimate of $13.26.

Key numbers for Q1:

  • EPS of $1.69 vs. the $1.68 expected.

  • Revenue of $2.47 billion vs. the $2.43 billion expected.

The modest top-line beat masked a widening divergence between Lululemon’s geographic markets. While international revenue rose 22% overall with a 30% increase in Mainland China, the bigger problem remains North America, where revenue fell 5%.

Interim co-CEO and CFO Meghan Frank acknowledged during the earnings call that recent product rollouts underperformed. A highly anticipated yoga campaign failed to generate its expected “halo effect” across broader product lines.

Profitability metrics took a major hit, with gross margins contracting by 410 basis points to 54.2% due to mounting tariff costs and promotional markdowns. Operating income consequently fell 37% year over year to $276.9 million.

“We experienced spikes of negative commentary in the media and on social channels with regard to our brand, which had an impact on traffic and overall top-line performance,” Frank said during the earnings call. “And second, not all of our product launches have met our expectations. While we have had several successful launches so far this year, we have seen others as we start Q2 not generate the anticipated guest response.”

Lululemon’s valuation has already been steadily compressing for years. While it was once one of retail’s richly valued stocks, investors have been questioning whether the company can return to the double-digit growth era.

The results also arrive during a leadership transition. Lululemon announced back in April that former Nike executive Heidi O’Neill is set to take over as CEO in September, with investors looking to her to revive growth in North America and restore the brand’s growth.

As Lululemon faces both macroeconomic pressure and brand-specific challenges, its stock has dropped around 40% year to date.

markets
Paige Oamek

US job growth skyrocketed in May, blasting past expectations

The US economy added 172,000 jobs in the month of May, the Bureau of Labor Statistics reported Friday, sending 10-year Treasury yields higher.

The strong May job market surprised economists. Experts had predicted only 85,000 new jobs — just half the reported number. The unemployment rate held steady at 4.3%, as expected.

The job growth story is a hopeful spot for the economy as consumers continue to feel inflationary pressure from the Iran war.

Job gains were buoyed by the leisure and hospitality sector, which added 70,000 jobs, as well as local government, healthcare, and education.

Both the March and April jobs reports were revised upward, making them collectively 93,000 higher than previously reported.

Latest Stories

Sherwood Media, LLC and Chartr Limited produce fresh and unique perspectives on topical financial news and are fully owned subsidiaries of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate, including Robinhood Markets, Inc., Robinhood Financial LLC, Robinhood Securities, LLC, Robinhood Crypto, LLC, Robinhood Money, LLC, Robinhood U.K. Ltd, Robinhood Derivatives, LLC, Robinhood Gold, LLC, Robinhood Asset Management, LLC, Robinhood Credit, Inc., Robinhood Ventures DE, LLC and, where applicable, its managed investment vehicles.
©2026 Sherwood Media, LLC