The Information reported Thursday that OpenAI's custom AI chip project with Broadcom has hit a major financing wall. Broadcom wants Microsoft to commit to buying 40% of the processors before it will front the initial $18 billion in chip production costs. OpenAI is targeting 2026 production on TSMC's 3nm process, and the deal is central to its plan to lower server costs as it projects burning over $200 billion through 2029.
Cloudflare's stock cratered despite beating Q1 revenue expectations at $639.8 million (up 34% YoY). CEO Matthew Prince announced the company's first mass layoff in its 16-year history, cutting 20% of its workforce and citing a 600% increase in internal AI usage. It is the most explicit case yet of a major tech company attributing layoffs directly to AI replacing human roles.
Intel hit an all-time high Thursday after the Wall Street Journal reported that Apple and Intel have reached a preliminary agreement for Intel to manufacture some Apple processors. The deal would diversify Apple's chip supply away from heavy TSMC dependence. Intel is now up roughly 175% year-to-date.
Nvidia and IREN announced a partnership to deploy up to 5 gigawatts of Nvidia's DSX-branded AI infrastructure. Nvidia secured a five-year right to take a $2.1 billion equity stake in IREN at $70/share, plus a separate $3.4 billion cloud services deal. IREN targets 150,000 GPUs by end of 2026. IREN stock jumped on the news.
The Nasdaq Composite jumped to a fresh all-time high on Thursday as strong April jobs data (115K added vs. 65K expected, unemployment steady at 4.3%) combined with AI demand to drive broad tech gains. The S&P 500 rose 0.76% to 7,392.56. Micron and SanDisk each rallied over 15% on AI memory demand.
Palantir reported Q1 revenue of $1.63 billion (up 85% YoY), crushing the $1.54B consensus, with EPS of $0.33 vs. $0.27 expected. Management raised full-year guidance to $7.65-$7.66 billion. The stock fell anyway — a classic beat-and-drop driven by valuation fatigue at roughly 85x forward earnings and 66x forward free cash flow.
AMD posted Q1 revenue of $10.3 billion and non-GAAP EPS of $1.37, both above consensus ($9.9B / $1.25). The data center segment hit $5.8 billion, fueled by EPYC processor share gains and the Instinct GPU ramp. Q2 guidance of $10.9-$11.5 billion topped the $10.52B estimate. Stock gained 4%.
SoundHound reported Q1 revenue of $44.2 million (up 52% YoY), but posted a net loss of $25 million and saw GAAP gross margin fall 5 percentage points to 31%. Operating cash flow came in at negative $26.3 million. Management reaffirmed full-year guidance of $225-$260 million, but the margin deterioration spooked investors.
Morgan Stanley raised price targets on both Nvidia and Broadcom following meetings in Asia and the U.S. that pointed to broad-based AI strength and tightening supply across the semiconductor chain. Broadcom's target moved to $443 from $409. Bank of America separately noted NVDA trades at a 30% discount to peers on market-cap-to-FCF, with projected FCF above $400 billion for 2026-2027 combined.
The Department of Defense announced agreements with eight major tech companies — including Alphabet — to deploy AI on classified networks. Google's contract permits use of Gemini models for "any lawful government purpose," though Google added language barring domestic mass surveillance and autonomous weapons without human oversight. 950 Google employees signed an open letter opposing the deal. Google Cloud revenue was already up 63% YoY in Q1.
