OpenAI leads top 10 private companies with $300 billion valuation. (0:15) Manufacturing back in contraction territory. (1:35) Jefferies gets bearish on airlines. (3:52) Show NotesThe best stocks to navigate tariffsCiti says Apple looking attractiveEpisode transcripts: seekingalpha.com/wsb Sign up for our daily newsletter here and for full access to analyst ratings, stock quant scores, dividend grades, subscribe to Seeking Alpha Premium at seekingalpha.com/subscriptions.
Chapter 1: What makes OpenAI the highest valued private company?
Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis. Good afternoon. Today is Tuesday, April 1st, and I'm your host, Kim Kahn. Our top story so far. OpenAI's latest funding round has propelled the startup beyond other unicorns to the rank of the highest valued private company in the world, according to some ranking systems.
Chapter 2: How did OpenAI's latest funding round affect its valuation?
The $40 billion funding round, which was done in partnership with SoftBank, has given the Microsoft-backed nonprofit a $300 billion valuation. Its valuation has now nearly doubled since October 2024, when a $6.6 billion funding round gave the company a $157 billion post-money valuation.
OpenAI said the latest funding will help it further AI research, scale its compute infrastructure, and deliver tools for the 500 million people who use ChatGPT every week. However, some of the latest funds come with a caveat from SoftBank, which requires OpenAI to transition to an independent, for-profit company by year's end.
Chapter 3: What are the implications of OpenAI's partnership with SoftBank?
According to a ranking compiled last month of the highest-valued unicorns in 2025 by Ekvista, OpenAI now easily ranks number one, surpassing TikTok parent ByteDance. The list is dominated by companies from the US, China, and India.
Chapter 4: Who are the top contenders in the unicorn valuation list?
The top 10 are OpenAI at $300 billion, ByteDance at $220 billion, Ant Group at $150 billion, SpaceX at $137 billion, Reliance Retail at $100 billion, Shine at $66 billion, Stripe at $65 billion, Databricks at $62 billion, Reliance Geo at $58 billion, and XAI at $50 billion.
Chapter 5: Why is the ISM manufacturing index contracting?
On the economic front, the ISM manufacturing index fell into contraction territory at 49 in March from 50.3 in February, trailing the 49.5 consensus. The contraction last month, with the index below 50, followed two straight months of expansion preceded by 26 consecutive months of contraction.
Chapter 6: How are tariffs affecting US manufacturers?
During the month, demand and output weakened while input strengthened further, a negative for economic growth. Pantheon macroeconomist Samuel Toombs says, This report contains some clear signs that manufacturers are unsettled by the uncertainty around President Trump's tariff policies, a factor mentioned several times in the press release commentary.
The headline index would have fallen further in March were it not for a 3.5-point jump in the inventories index, which presumably reflects some pre-tariff stockpiling. In the latest JOLTS report, the number of job openings in February slipped to 7.568 million from 7.69 million in January, which was revised from 7.74 million.
Chapter 7: What do job openings data say about the labor market?
That came in lower than the 7.6 million consensus and signals further cooling in the labor market. The job openings rate fell to 4.5% from 4.7% in the prior month, and the quits rate was 2%, unchanged from January, which was revised down by 0.1 percentage point. The overall hiring rate in February stayed even at 3.4% for the third straight month.
Chapter 8: What are the current trends in hiring and separations rates?
Wells Fargo economists say hiring managers and workers alike seem to be stuck in wait-and-see mode as they wait to find out which way the economic policy breaks from here. The good news? As depressed as the hiring rate is at present, the overall separations rate has continued to move lower, and the widening gap has helped to support net job growth.
Further, the labor market has entered 2025 roughly where the Fed wants it, The bad news, new headwinds have emerged that threaten to upend what has been a precarious equilibrium. Among active stocks, Citi says the risk-reward for Apple looks attractive following a recent sell-off in the stock and the expansion of Apple intelligence to several new languages.
Analyst Atif Malik said, We think Apple will likely reset Siri software expectations on the next earnings call before heading into the Worldwide Developers Conference on June 9th. Apple's stock price is getting closer to our bear case scenario following the Siri delay sell-off and the risk-reward looks attractive. Malik maintained his buy rating and $275 price target.
Jefferies turned cautious on the airline sector. The firm warned that consumer sentiment continues to disappoint and pointed out that tariffs, which take effect this week, could continue to impact investor confidence. Analyst Sheila Kayogla also expects corporate spending will be lower for the balance of the year.
She downgraded American Airlines and Delta Airlines to hold ratings after having them set up by. Meanwhile, Air Canada and Southwest Airlines were lowered to underperform from hold. Specifically, she warned that American, Air Canada, and Southwest will cut their 2025 guidance.
And Goldman Sachs upgraded Ulta Beauty to a buy rating from Neutral, calling it potentially a strong addition to an investor's portfolio. Analyst Kate McShane said, Looking at Ulta vs. Sephora, searches for Ulta continue to track above Sephora, with the gap between the two for March to date the widest it's been so far in 2025.
From a merchandising perspective, Ulta called out its Ulta Beauty Collection brand, and beyond that, Ulta has some exposure from a store perspective, fixtures, lighting, supplies. In other news of note, China EV delivery numbers came in for Q1. NIO delivered 42,094 vehicles in the first quarter of 2025, growth of 40.1% year-over-year.
March deliveries grew 26.7% year-over-year to 15,039 vehicles, which consisted of 10,219 vehicles from the company's premium smart electric vehicle brand NIO and 4,820 vehicles from its family-oriented smart electric vehicle brand Envo. XPeng delivered 33,205 Smart EVs in March, marking a 268% increase year-over-year, with Q1 deliveries up 331% to 94,008.
Leo Auto delivered 92,864 vehicles in Q1, marking a growth of 15.5% year-over-year. And BYD sold 986,098 passenger vehicles globally in Q1, up 57.92% from the same quarter in 2024. And in the Wall Street Research Corner, Morgan Stanley strategist Mike Wilson is out with his list of stocks best positioned to navigate the global tariff landscape.
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