Stocks began the day in the red on Friday, primarily due to a decline in technology stocks following reports that OpenAI, the AI powerhouse behind ChatGPT, is contemplating postponing its initial public offering (IPO). While the main equity indexes showed positive signs around lunchtime, buoyed by defensive sectors such as healthcare and consumer staples, the upward momentum dissipated as the trading day progressed.
The New York Times reported late Thursday that advisers are recommending CEO Sam Altman consider delaying OpenAI’s IPO until 2027. This advice comes amid notable market turbulence following SpaceX’s recent IPO, which has been characterized as the largest ever, but also highly volatile. OpenAI had confidentially filed its IPO paperwork with the Securities and Exchange Commission in early June, and initial forecasts speculated a possible market debut in the third quarter of 2026.
Market analyst Luke Lango, a lead technology and cryptocurrency analyst at InvestorPlace, commented on the situation, suggesting that a delay could be strategically beneficial for OpenAI. He noted the current competitive landscape, particularly with rising rivals like Anthropic, and emphasized the recent volatility experienced by SpaceX’s valuation as factors that might warrant caution.
Consequently, the Nasdaq Composite index opened with a decline of over 1%, ultimately closing down by a marginal 0.2% at 25,297. Among the hardest-hit segments within the tech sector were memory chip stocks, with Micron Technology and Sandisk suffering significant losses of 6.7% and 10.5%, respectively.
The broader S&P 500 index slipped by 0.05%, closing at 7,354, while the Dow Jones Industrial Average, which is set to add Google parent company Alphabet to its roster next week, fell 0.09% to settle at 51,876.
In another significant development, ON Semiconductor saw its shares plunge 23.7%, making it the worst performer in the S&P 500 on Friday. This sharp decline followed the announcement that the chip manufacturer would acquire Synaptics in an all-stock deal valued at about $7 billion. Analysts suggest that this drop indicates a preference among investors for data center-focused advancements rather than edge enhancement technologies, despite ON Semiconductor’s efforts to expand its portfolio into intelligent systems.
In contrast, Moderna experienced a notable surge, with its stock soaring by 12.6%, making it the leading gainer in the S&P 500. This boost can be attributed to a broader rotation into defensive stocks and positive news surrounding the unveiling of the company’s first in vivo CAR-T autoimmune therapy program during an investor day event. Analysts noted growing investor interest in Moderna’s oncology pipeline and new avenues for growth, even though major developments related to these new programs are not expected until at least 2030.
Amidst the fluctuating landscape, analysts maintain a cautious stance on some of these stocks, with recommendations reflecting both optimism for certain sectors and wariness towards others, as market participants navigate the complexities introduced by evolving technologies and market conditions.
