""OpenAI was the golden child earlier this year, and Alphabet was looked at in a very different light," said Brett Ewing, chief market strategist at First Franklin Financial Services. "Now sentiment is much more tempered toward OpenAI.""
""A light has been shined on the complexity of the financing, the circular deals, the debt issues," Ewing said. "I'm sure this exists around the Alphabet ecosystem to a certain degree, but it was exposed as pretty extreme for OpenAI's deals, and appreciating that was a game-changer for sentiment.""
Wall Street sentiment has shifted from companies tied to OpenAI toward those tied to Alphabet. OpenAI faces doubts about leading-edge status, profitability, and the need to grow rapidly to cover massive spending commitments. Scrutiny of complex financing, circular deals, and debt has undermined confidence in OpenAI's ecosystem. Shares of OpenAI-connected firms including Oracle, CoreWeave, Advanced Micro Devices, Microsoft, Nvidia and SoftBank have come under heavy selling pressure. Alphabet's deep pockets and broad AI presence are boosting its stock and supporting suppliers such as Broadcom, Lumentum, Celestica and TTM. The shift has been dramatic and rapid.
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