OpenAI Fails to Hit Revenue Target, Google Inks AI Deal with Pentagon

Markets edged higher on Monday, with the S&P 500 up 0.1% and Nasdaq up 0.2%, both hitting records. The S&P is up 10% in April, its best month since November 2020. This rally relies heavily on a handful of semiconductor stocks, led by Nvidia, which rose 30% in the past month to a nearly $5.3 trillion market cap. The episode covers OpenAI's revenue shortfalls dragging on related stocks, Google's new AI contract with the Pentagon, mixed corporate earnings, oil price pressures from Iran tensions, upcoming Fed comments, and a World Cup beer sales projection.

Narrow Market Rally and Earnings Watch

The market's gains mask concentration risks. Per Funstrat, excluding Nvidia from the Magnificent Seven (Meta, Apple, Amazon, Microsoft, Google, Tesla) drops their quarterly earnings growth to 0.7%, trailing the 10% expected from the S&P 500's other 493 companies. Semiconductor peers like Micron, Broadcom, and Sandisk drive most growth. Hyperscalers report earnings Wednesday after close, with focus on AI capital spending plans and market reactions. Oil adds caution: Brent crude hit $112 per barrel and WTI topped $100, highest since early April, amid stalled Iran peace talks and a closed Strait of Hormuz. The Fed concludes its meeting Wednesday, with Jerome Powell's rate comments in focus amid high gas prices.