AI Spending Fears Hit Tech Stocks As S&P 500 Pulls Back From Record

This article first appeared on GuruFocus.

US stocks pulled back on Tuesday, with the S&P 500 Index (SPY) slipping 0.7% from its record level by midday in New York, as renewed questions around artificial intelligence spending began to weigh on sentiment. The Nasdaq 100 Index dropped more than 1%, while chipmakers Nvidia Corp. and Broadcom Inc. were among the biggest drags. The move followed a report that OpenAI missed internal targets for user growth and sales over several months, raising concerns internally about its ability to sustain elevated AI infrastructure spending. Stocks tied to that ecosystem, including CoreWeave Inc. and Oracle Corp., fell more than 3% even as OpenAI pushed back against the narrative.

The pressure extended across semiconductors, with the Philadelphia Semiconductor Index dropping more than 4% and all 30 of its components trading lower, a sharp reversal after a record run. The timing is notable, coming just ahead of earnings from hyperscalers including Amazon.com Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), Meta Platforms Inc. (NASDAQ:META), and Microsoft Corp. (NASDAQ:MSFT) during a packed reporting week. Some strategists suggested the reaction may be more about positioning than fundamentals, noting that semiconductor companies still appear to have order backlogs beyond OpenAI-related demand, while others argued that enterprise and consumer AI demand remains strong despite the latest concerns.

Beyond technology, macro forces added another layer of complexity. Brent crude rose roughly 3% to around $111 per barrel as tensions in the Middle East persisted, with the Strait of Hormuz still shut. US President Donald Trump said Iran wants to reopen the waterway as soon as possible while working through leadership questions, while reports indicated a revised proposal to end the conflict could be submitted in the coming days. Investors are also tracking the United Arab Emirates’ planned exit from OPEC and OPEC+ starting May 1, a shift that could reshape supply dynamics. Even with these crosscurrents, the S&P 500 remains near record levels and is still tracking toward a strong monthly performance, suggesting the current pullback could be more of a pause than a structural shift, depending on how earnings and policy signals evolve.