Martin Gamble on US markets: OpenAI readies its blockbuster IPO

The S&P 500 was on track to log its first weekly pullback since March driven by a sharp sell-off in technology stocks, until President Trump cancelled strikes against Iran and signalled a deal could be announced soon.

This prompted a sharp turnaround for the major indices on 11 June with the S&P 500 gaining 1.7%, the Nasdaq Composite up 2.5% and the economically sensitive Russell 2000 gaining 3% on hopes that interest rate increases may not happen.

Consumer price inflation rose at the fastest pace since April 2026 to an annual rate of 4.2%, while producer prices rose by a higher than expected 1.1% in May, taking the 12-month rate to 6.5%, the highest since November 2022.

AI systems maker Super Micro Computer was the biggest faller in the S&P 500 after announcing a $7 billion capital raise to purchase components to meet demand for its advanced servers.

The fall reflects investor concern over the potential earnings dilution from issuing millions of new shares with the capital raise representing around 40% of the company’s market value.

OpenAI lines up its market debut

OpenAI, the company which ignited the AI boom with the launch of ChatGPT, has taken its first formal step towards a stock market listing, having been beaten to the punch by Claude-owner Anthropic which unveiled its own plans at the beginning of June.

OpenAI’s plans for a 2026 IPO were one of the worst kept secrets on Wall Street, but it is still a landmark moment to see the business formally begin the process of becoming a public company.

Reportedly seeking a valuation of more than $1 trillion, the listing looks set to provide a useful barometer of market sentiment and investors’ willingness to back companies like OpenAI, which are chalking up huge losses as they invest heavily in data centres and other infrastructure.

When the prospectus is published, OpenAI’s financial position will be picked over in detail. A recent wobble in AI-related stocks was also a reminder that there is no guarantee appetite for all things artificial intelligence will be as strong when OpenAI goes public, likely in the autumn, as it is today.

Oracle investors recoil at $40 billion capital raise

Oracle saw its shares fall after reporting record fourth quarter results, reflecting investor concerns over its plans to raise $40 billion in new debt and equity in its 2027 financial year.

The fall also reflects profit taking with the shares rising around 80% in the three months to the start of June.

Oracle said AI cloud infrastructure has become its main growth engine with revenues almost doubling to $5.8 billion in the quarter. Remaining performance obligations (RPO), which represents the value of total contracted revenues, rose 363% year-on-year to $638 billion.

The company emphasised that most of the increase in RPOs in the fiscal second half came from large scale AI contracts where customers either pre-paid Oracle for the AI chips or bought and supplied the chips themselves.

Nevertheless, despite fiscal 2026 operating cash increasing by 54% to $32 billion, free cash flow was a negative $23.7 billion, reflecting continued capital expenditures in AI infrastructure.

The company expects fiscal 2027 capital expenditures of up to $95 billion, with net expenditures of $70 billion including customer contributions.

This spending equates to 78% of projected annual revenue guidance of $90 billion.

A key question for investors is how quickly Oracle can bring contracted capacity online, manage funding needs, while preserving margins.

Adobe sinks to 8-year low as finance chief departs

Adobe shares sank 5% after hours despite second quarter earnings coming in ahead of analysts’ expectations and the company raising its full year outlook.

The shares have lost nearly half of their value over the last year on concerns that AI will disrupt the business and reduce demand for Adobe’s creative software.

Coming only three months after long-time CEO Shantanu Narayen decided to step down, Adobe announced that chief financial officer Dan Durn will leave on 15 June to join custom AI chip maker Marvell Technologies.

The company now expects fiscal 2026 adjusted earnings per share of $24.40 on sales of $25.55 billion at the midpoint of the new range, representing growth of 17% and 12%, respectively.