Key Takeaways
- OpenAI closed a historic $122 billion funding round, valuing the company at $852 billion post-money as it prepares for a potential IPO.
- Nike (NKE) surpassed Q3 expectations with revenue of $11.28 billion and a significant earnings beat in Greater China, where EBIT reached $467 million.
- Geopolitical tensions surged as U.S. and Israeli forces reportedly struck major Iranian steel plants, while the IRGC claimed a retaliatory strike on U.S. personnel in Saudi Arabia.
- Treasury Secretary Scott Bessent noted that 10-year U.S. Treasuries are poised for their biggest month of gains as markets react to the ongoing conflict.
- President Donald Trump signaled a potential shift in the Middle East conflict, telling NBC News that the war with Iran is "coming to an end."
OpenAI Reaches $852B Valuation in Massive Funding Round
OpenAI has finalized a record-breaking $122 billion funding round, catapulting its valuation to $852 billion. The round was anchored by tech giants including Amazon (AMZN), Nvidia (NVDA), and SoftBank (SFTBY), with continued participation from Microsoft (MSFT). The company revealed it is now generating $2 billion in revenue per month, reflecting a massive scale-up in its commercial operations.
The capital infusion is earmarked for the development of a unified AI "superapp" and the expansion of its core infrastructure. OpenAI also confirmed its inclusion in several ARK Invest ETFs, further solidifying its status as a cornerstone of the burgeoning AI economy. Despite its rapid growth, the company remains focused on a potential IPO later this year as it continues to outpace the early growth metrics of previous tech leaders.
Nike Beats Q3 Estimates Despite Global Volatility
Nike (NKE) reported fiscal third-quarter earnings that beat Wall Street estimates on both the top and bottom lines. The company posted revenue of $11.28 billion and earnings per share (EPS) of $0.35, compared to analyst expectations of $11.24 billion and $0.28, respectively. A standout performance in Greater China drove results, with EBIT hitting $467 million, nearly double the estimated $269.5 million.
Despite the beat, Nike's gross margin fell 130 basis points year-over-year to 40.2%, and the stock saw a 3.28% decline in after-hours trading. Management highlighted a "sport-focused push" that is beginning to produce results, though Nike Direct revenue saw a slight dip of 4% to $4.5 billion. Inventory levels remained healthy at $7.49 billion, coming in just below the $7.53 billion estimate.
Middle East Conflict Escalates with Strikes on Iranian Industry
The conflict in the Middle East intensified as Iranian state media reported that the Mobarakeh and Khuzestan steel plants were targeted by U.S. and Israeli airstrikes. This marks the second time in a week that the Mobarakeh facility in Isfahan has been hit. In a sharp escalation, the IRGC Aerospace Force claimed it used drones and missiles to target a gathering of 200 U.S. pilots and flight crew at the Al-Kharj base in Saudi Arabia.
Amid the violence, President Trump told NBC News that the war is "coming to an end," though he did not provide a specific timeline or diplomatic framework. Meanwhile, a drone attack reportedly targeted a logistics support base of the U.S. embassy at Baghdad Airport. The ongoing instability continues to pressure global energy markets and defense sectors.
Treasury and Corporate Briefs
Treasury Secretary Scott Bessent highlighted the resilience of the 10-year U.S. Treasury market, which is on track for a historic monthly performance. Bessent noted that despite the conflict, the "market is well supplied" as countries release strategic petroleum reserves. In other corporate news, Microsoft (MSFT) Energy VP Bobby Hollis announced his departure from the company, and the Ontario Securities Commission accused KPMG of audit deficiencies related to Bridging Finance Inc. funds.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.