Wall Street Rebounds on OpenAI Revenue Report as SpaceX Spectrum Deal Hits Carrier Stocks

Since Nasdaq and Nvidia set record highs on Monday, Oct. 5, the week has turned choppy: an AI-revenue scare on Thursday, a rebound on Friday, and a SpaceX deal that rewrote the outlook for U.S. wireless carriers.

The Dow Jones Industrial Average gained 423 points, or 0.8%, to 51,655 on Friday. The S&P 500 added 46 points, or 0.6%, to 7,812. The Nasdaq Composite rose 173 points, or 0.6%, to 27,366.

The Nasdaq 100 posted its fourth straight weekly gain, and the S&P 500 finished inches below its record, according to Bloomberg.

OpenAI numbers calm the tech selloff

Thursday's drop was driven by AI revenue worries. Bloomberg's Nasdaq 100 coverage put that day's decline at 1.4% after an OpenAI warning deepened bubble fears.

Friday's bounce followed a Bloomberg report that OpenAI expects to reach or exceed $70 billion in annualized revenue by year-end. An earlier report had suggested the company's sales would fall short of expectations.

CNBC's Investing Club said the report "cleared up confusion" about OpenAI's revenue outlook. Tame bond yields and oil prices also helped.

The backdrop is not calm. The 10-year Treasury yield hit 5.31% on Monday, near its highest level since 2002. Brent crude has been above $100 a barrel amid the war in the Middle East.

Hedge-fund founder Ray Dalio has said the market is nearing a point where an AI bubble may burst, according to Bloomberg. Some on Wall Street are pushing back on the idea that the market has climbed too far, too fast.

SpaceX buys spectrum, carriers take the hit

The sharpest single-sector move of the week was in telecom. Grain Management said it has a definitive agreement under which SpaceX will acquire its entire 800 MHz spectrum portfolio, 14 MHz of paired nationwide spectrum.

The Wall Street Journal, citing people familiar with the matter, put the price at about $8 billion in cash. CNBC's Investing Club also described the deal as an $8 billion spectrum purchase.

SpaceX said the deal "will pave the way for Starlink to become a major mobile carrier in the U.S." Musk wrote on X: "This is the last critical piece of the spectrum puzzle needed for SpaceX to provide complete phone coverage in America." He added: "Very big deal."

Carrier shares fell hard. In extended trading after the news, AT&T, T-Mobile and Verizon each dropped about 6%, according to Broadband Breakfast. CNBC's Investing Club later put T-Mobile's decline at 13% and Verizon's and AT&T's at roughly 10% each. T-Mobile took the biggest hit.

Goldman Sachs and Barclays both published bullish notes on SpaceX this week, according to CNBC.

The incumbents have long argued otherwise. Mobile carriers have repeatedly claimed that Starlink Mobile lacks a viable strategy, financially or scientifically. Wall Street's reaction suggests investors now see the competitive threat differently.

Musk's week: a White House medal and a fight with India

On Thursday, Oct. 8, President Trump presented Musk with the National Medal of Science at the White House. The citation praised "engineering achievements of extraordinary ambition and scale." Google co-founder Sergey Brin, Nvidia CEO Jensen Huang and AMD CEO Lisa Su also received science medals. Michael Dell and Microsoft's Satya Nadella received the National Medal of Technology and Innovation.

The same day, Musk was fighting with India's government. He posted dozens of times about Starlink's unapproved status there. "Unfortunately, we are being blocked by certain oligarchs in order to maintain their monopolistic chokehold on the Indian people," he wrote. He later asked whether Reliance Jio's Mukesh Ambani is "the real boss of India."

Starlink first applied for Indian licenses in 2022 and received a license last year. It is still awaiting final approval.

India's Ministry of Communications rejected the charge. It said it has granted licenses to three unnamed satellite operators, all "required to demonstrate compliance with security conditions." It said its security assessment is underway and the companies are "at broadly the same regulatory stage." The ministry called the suggestion that its framework is unfair or discriminatory "baseless and misconceived."

Jio and Airtel both signed partnerships with Starlink last year. Both also have satellite plans of their own. Airtel has partnered with Eutelsat, the French firm behind OneWeb. Airtel chairman Sunil Mittal is a Eutelsat co-chair.

Musk is also scheduled to join Saturday's X Takeover event at Giga Texas for a live virtual interview. Tesla reports third-quarter earnings Oct. 21. NHTSA's deadline for Tesla's sworn answers on Cybercab certification is Oct. 30.

What comes next

Earnings season opens Tuesday, Oct. 13. Wells Fargo, JPMorgan Chase, Goldman Sachs, Johnson & Johnson, UnitedHealth and Domino's all report. Bank of New York Mellon follows Thursday.

September consumer prices are due Wednesday and producer prices Thursday. Both could shift expectations for the Federal Reserve's meeting later this month.

The Fed raised rates in September for the first time in three years. Markets expect a hold this month, but the CME FedWatch tool still favors a December hike.