Western Digital, Bloom Energy and Comfort Systems beat forecasts and still sold off after hours. OpenAI's round is set to price below the figure under discussion. A SpaceX tower report lifted Crown Castle and hit the carriers.
The AI Selloff Paused Overnight. The 10-Year Closed Below 5%.
The Nasdaq Composite fell 2.6% on Thursday, the S&P 500 lost 1.2% and the Dow was flat. The Philadelphia chip index dropped 6.7%.
Early Friday, S&P 500 futures were down about 0.3% and Nasdaq 100 futures were little changed.
The 10-year Treasury yield closed at 4.96%, down 17 basis points and below 5% for the first time since September. A sale of five-year inflation-protected notes drew the weakest demand for that maturity since April 2025.
Brent crude traded near $114.60 early Friday, above Thursday's settlement, which was its highest close since May. France's private sector shrank in October, on the day Moody's reviews the country's credit rating.
AI demand keeps showing up in results. Investors are now pricing what that growth costs, and who pays for it.
Investor Signal
Traders scaled back bets on further Fed rate increases, which lowers the cost of new borrowing. That relief has not reached the AI names, where the concern appears to be cost and funding more than rates. Friday's flash business surveys and the Fed's Oct. 27 to 28 meeting are the next tests for lower yields.
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Three AI Suppliers Beat Forecasts. All Three Fell After Hours.
Western Digital (WDC) beat forecasts and guided above them. Revenue rose 55% to $4.38 billion, and adjusted earnings were $4.64 a share. The midpoint of its December-quarter earnings forecast is about 20% above estimates.
The shares rose about 4% after the release, then fell more than 8% during the call. According to accounts of the call, management said capital spending will average 4% to 6% of revenue over five years and flagged rising input costs. Early Friday, the stock was about 4% below Thursday's close.
Bloom Energy (BE) more than doubled its sales to $1.24 billion and raised its full-year forecast for a third time. Its shares had fallen 8.7% on Thursday, then slid another 5% to 7% after hours.
Comfort Systems USA (FIX), a contractor whose work includes data centers, nearly doubled its backlog from a year earlier to a record $17.8 billion. It gave no forecast, and the shares fell 6.2% after hours.
Investor Signal
Demand was not the weak spot. The selling tracked cost and visibility, from a higher spending plan to a record backlog with no forecast. Storage booms have often ended in oversupply, so Western Digital's spending ratio is the number to watch. The largest cloud providers report next week, and their spending plans set the demand side of this trade.
OpenAI's Round Is Set to Price About 11% Below the Figure Under Discussion
OpenAI is in the final stages of raising up to $30 billion at $1.25 trillion before the new money, according to news reports. The figure under discussion had been $1.4 trillion, so the price is about 11% lower. Coatue and Emirati investors are reported to be leading the round.
The new price is still about 47% above the $852 billion value set after OpenAI's March raise.
The lower figure was reported after a day of heavy selling in AI stocks. In South Korea, SK Telecom's data-center unit, SK Hyper, is seeking partners for a first phase it estimates at $350 billion. Its chief executive said in an interview that finding global demand is the biggest challenge.
Investor Signal
Private AI prices usually trail public markets, and this one moved lower before the deal closed. A 47% step-up is still a large up-round, so the change is in direction more than damage. SK Hyper's warning matters because a data center is only worth as much as its tenants. Funds that hold OpenAI stakes are likely to mark them to the final price.
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A SpaceX Network Report Lifted Tower Owners and Hit the Carriers
SpaceX (SPCX) aims to secure at least 80,000 U.S. cell sites for a wireless network, Bloomberg News reported. It is in talks with at least one large tower company, including Crown Castle (CCI). No deal has been announced.
Crown Castle rose 9.3% after hours. AT&T (T) fell 5.9% and T-Mobile US (TMUS) 4.1%. Early Friday, Crown Castle was up about 9% and both carriers were down 4% to 5%.
SpaceX's quarterly filing said no decision has been made on a combination with Tesla (TSLA). Any deal would need approval from its controlling shareholder, Elon Musk. Verizon (VZ) reports results on Monday.
Investor Signal
A new tenant adds high-margin rent to towers that are already built. The same network would compete with the carriers that pay most of that rent. Talks may not produce leases, and terms are unknown. Verizon's comments on a new rival on Monday are the first test of the after-hours read.
Deckers Raised Its Profit Forecast. Tariff Refunds Did All the Work.
Deckers Outdoor (DECK), which owns Hoka and Ugg, cut its full-year sales forecast by about 3%. Quarterly sales of $1.48 billion missed estimates.
It raised its full-year earnings forecast to $7.80 to $7.95 a share. That includes about 52 cents a share of tariff refunds. Without them, the range sits slightly below its July forecast.
Executives said shoppers want discounts, and the company is resisting markdowns. Its shares traded about 8% lower early Friday.
Investor Signal
A refund that will not recur lifted the headline, while the sales outlook fell. Investors looked past the headline, as they did with the AI beats. Holding prices protects margins only if shoppers keep paying full price into the holidays. Hoka's growth in the holiday quarter is the test of whether this is discipline or a maturing brand.
AI CEO Issues Code Red: Prepare for Meltdown
The CEO of this AI company (click here to get the name, 100% free) just issued a CODE RED in an internal memo…
Warning his employees that they’re dealing with a critical situation.
Another company executive even implied they might need a government bailout.
And now Jim Rickards is predicting this company is about to go bust, in a full-blown AI meltdown that could be 10 times bigger than Lehman Brothers.
Bitcoin Funds Swung From Buying to Selling in a Day
Investors pulled a net $635.6 million from U.S. spot bitcoin funds on Thursday, a sharp reversal from about $528 million of inflows a day earlier. By one tracker's count, it was the largest outflow since June 25 and turned October's flows negative.
Bitcoin fell about 3% from Wednesday evening through Thursday, then held near $81,600 early Friday.
Crypto stocks fell harder. Galaxy Digital (GLXY) dropped 9.7%, IREN (IREN) 8.4% and Riot Platforms (RIOT) 8.1%. Coinbase (COIN) and Strategy (MSTR) report on Oct. 29.
Investor Signal
Several of these companies also host AI computing, which may link Thursday's selling to the AI trade. Another large outflow would point to a broader retreat from risk. A return to inflows would suggest a single bout of de-risking.
Demand for AI is still showing up in the numbers. Western Digital, Bloom and Comfort Systems all beat, and all three fell after hours. In public stocks, investors are pricing what the growth costs. Reports of a lower price in OpenAI's talks came out the same evening.
Next week, the largest cloud providers will show whether they plan to spend more, and how much of the bill they are ready to carry.
Rates Just Reset. Who Feels It First?
On January 2, the 10-year Treasury yielded 4.19%. By September 30, it was 5.29%. Most of that move landed in a single quarter.
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