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Matt Phillips6h

Data center trade deep in the red

The data center trade is seeing its steepest sell-off since the market rout that was ignited by President Donald Trump’s Rose Garden tariff announcement back in April.

Goldman Sachs’ themed basket of AI data center shares was down more than 6% at around 12 p.m. ET, putting it on track for its worst day since the tariff announcement.

Losses hammered seemingly every form of input needed for the sprawling concrete server warehouses at the heart of the investment boom.

Hardware makers including data storage companies like Sandisk, Western Digital, and Seagate Technology Holdings, as well as DRAM maker Micron — some of the best-performing stocks in the S&P 500 this year — were taking a licking, as were networking stocks Cisco and Arista Networks and data center builders such as Vertiv Holdings and electrical and mechanical contractor Emcor.

Optimism for all things AI has seemed to evaporate throughout the week, as the stock market greeted lackluster quarterly numbers from Oracle and Broadcom with jittery sell-offs and concern about growing debts that could crater cash flows.

Those worries seem to be spreading to ancillary beneficiaries of the AI boom on Friday, gouging a chunk out of charts that retail dip buyers have not — at least so far — stepped in to buy as we head into the weekend.

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Toby Bochan, Luke Kawa

Markets end the week in the red as Broadcom and Oracle concerns drag the entire AI trade down

The S&P 500, Nasdaq 100, and Russell 2000 were all negative on Friday.

The lunchbox

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Oracle denies Bloomberg report that it’s delaying some data centers for OpenAI to 2028 from 2027

Getting a multi-hundred-billion-dollar backlog for cloud computing revenues from data center projects is easy. Building them is hard.

Oracle extended declines to as much as -6.5% on the day on the heels of a Bloomberg report that the cloud giant has pushed back the completion dates for some of the data centers it’s building for OpenAI to 2028 from 2027, citing people familiar with the work. Oracle denied this report, telling Reuters that there have been no delays to any sites required to meet its contractual commitments and that all milestones remain on track.

Shares had fully pared their report-induced drop ahead of Oracle’s reply, but remain in the red for the day.

Bloomberg said the reported postponement was attributed to labor and material shortages.

Oracle has been spending more on capex than Wall Street had anticipated, leading to higher-than-expected cash burn. Management boosted its full-year capital spending plans by $15 billion after reporting Q2 results earlier this week.

Oracle’s cloud infrastructure sales came in short of estimates in its fiscal 2026 Q2, a signal that markets already had reason to doubt its ability to quickly turn its humungous RPO (that is, remaining purchase obligations) into revenues.

Traders also seem to be of the mind that potential delays to data center completions are going to limit sales for what goes into them.

Some of the bigger losers since the Bloomberg headline hit the wires include:

Nvidia and Advanced Micro Devices, the latter of which struck a deal to deploy 50,000 of its AI chips in Oracle data centers.
AI REITs like Equinix and Digital Realty.
Server company Dell as well as other AI-geared stocks like Constellation Energy, Arista Networks, Corning, Generac Holdings, Quanta Services, Vistra, and Eaton Corp.

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Broadcom’s post-earnings tumble is weighing on Google’s entire AI ecosystem

Broadcom’s post-earnings plunge is prompting a sharp pullback in Google-linked AI stocks, which had been on fire thanks to the warm reception to Gemini 3.

The stocks getting hit hard:

Celestica, which supports Broadcom’s Tomahawk switch chipset for AI networking.
TTM Technologies, which manufactures the circuit boards that are the foundation for Broadcom’s AI chips.
Lumentum, whose laser technology lets information move around quickly in data centers.

A basket of these Google-linked AI stocks compiled by Morgan Stanley is suffering one of its worst losses of the year. This brisk retreat also follows the release of GPT-5.2 by OpenAI.

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Matt Phillips8h

Citi initiates coverage of Planet Labs with “buy” rating

Planet Labs was up after aerospace and defense analysts at Citi initiated coverage with a “buy/high risk” rating and $19 price target.

The stock is up more than 40% this week, after a strong earnings result that spotlighted the company’s growing opportunity in linking its core business of capturing daily images of the planet with AI technologies.

Citi analysts noted the potential for a positive flywheel effect for Planet Labs as it deepens its focus on integrating AI into its offerings:

“AI is accelerating the conversion of pixels to decisions, where Planet’s daily scan and deep archive offer a uniquely large training corpus and broad-area foundation for automation. AI-enabled solutions (MDA/GMS/AMS) are gaining traction with customers such as NATO and the U.S. DoW, validating the approach of integrating AI into broad-area monitoring products... These AI moves create a compounding advantage: more coverage generates more training data, which improves models, which in turn increases product utility and addressable demand.”

The stock has also caught the attention of some of the retail trading crowd, with call options activity spiking on Thursday as traders rode the market reaction to the results.

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Max Knoblauch8h

After a good night’s rest, investors decide they liked Rivian’s AI Day event, sending the stock surging

Wall Street didn’t seem to care very much about Rivian’s AI news when it dropped yesterday, but today is a new day.

Shares of the EV maker are up more than 16% on Friday morning, with call volumes already at about 70% of their 20-day average just 20 minutes into the trading session. The price action propelled Rivian stock to its highest level since January 2024.

Following Rivian’s Thursday event, in which it said it would replace Nvidia chips with its own and hinted at a robotaxi plan, Needham & Co. sharply hiked its price target on the company from $14 to $23. Analyst Chris Pierce wrote that the AI event “strengthened [Needham’s] conviction in RIVN’s longer term autonomy roadmap and points of differentiation vs legacy OEMs.”

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