AI stocks crumble on report that OpenAI's annualized revenue is much lower than believed

European shares fell on Tuesday, led by tech sector declines after Apple warned of margin compression from rising chip costs. Semiconductor stocks like ASML and STMicroelectronics dropped 2-4%. Oracle's $20B capital raise also raised AI funding concerns. Lufthansa and Philips shares moved on earnings news. U.S. midterms and nonfarm payrolls added to market caution.

Oracle raised $20bn via equity and debt offerings to fund AI and cloud expansion. The $10bn stock sale priced 86.2m shares at $116 each, an 11.2% discount. The $10bn debt offering includes notes with 7%-8.65% interest rates. Proceeds will support general corporate purposes, including capex and potential acquisitions. Oracle expects net proceeds of ~$9.9bn from equity and ~$10bn from debt.

Oracle plans to raise $20 billion by selling stock and issuing bonds to fund its AI expansion, according to DIGITIMES, amid concerns over its debt-fueled growth strategy.

Nvidia (NVDA) has asked data center partners to limit sales to Chinese customers, requiring at least 51% of services to be sold to non-Chinese companies, according to the Financial Times. The move aims to reduce Chinese access to advanced U.S. chips for AI development, amid ongoing U.S. restrictions on such sales. The instructions were delivered verbally, not in writing.

AMD is set to report Q3 sales of $13.09B, up 41% YoY. Morgan Stanley raised its price target to $510, citing strong analyst sentiment. Intel's weak forecast and PC market concerns have pressured AMD's stock. AMD's results will indicate if Intel's issues are sector-wide.

Meta, Oracle, and Alphabet are raising billions via bonds to fund AI investments. Meta plans at least $20B in dollar- and euro-denominated bonds, with maturities ranging from 5 to 38+ years. Oracle aims to raise $20B through bonds and new shares, with $10B in bonds maturing between 2029-2046. Alphabet is selling €6B in bonds with maturities from 2 to 19 years.