OpenAI recently said that it has a $50 billion revenue run rate, which is less than the $68 billion that the market previously thought.
Slower AI growth could impact Nvidia’s sales.
Nvidia stock is attractively priced.
OpenAI changed the world four years ago when it launched its artificial intelligence (AI) model, ChatGPT, sparking an AI revolution that led to the emergence of multiple competing models. It recently postponed its plans to go public, which means investors don’t have access to its financial data beyond what it chooses to disclose. Since it’s not a public company, its growth rates aren’t directly relevant to investors, but many still track them to gauge the pace of AI development more broadly.
For example, if companies like OpenAI and rival Anthropic, the maker of the Claude AI model, are growing rapidly, they’ll likely need more data center processing power. That would be great news for Nvidia (NASDAQ: NVDA), which supplies a large fraction of the processors that power data centers.
Missed AI’s “Act 1”? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout. Continue »
Nvidia CEO Jensen Huang. Image source: Getty Images.
Conversely, if it looks like demand for AI accelerator chips is waning, the market sours on Nvidia, and that’s what happened last week. OpenAI said it had a $50 billion revenue run rate, $18 billion less than the figure that was previously circulating.
Several AI stocks tanked on the news, including Nvidia, which is down 4% since the news came out. That might not sound like a lot, but for a $5 trillion company, it translates into $200 billion. Should retail investors view this as a buying opportunity?
Nvidia isn’t the only AI chipmaker around, but its chips are critical providers of power for the high-level inference and reasoning that support AI functions. That means all large models require Nvidia chips and, increasingly, full Nvidia compute systems. It recently launched its latest platform, Vera Rubin, which combines Rubin graphics processing units (GPUs), Vera central processing units (CPUs), large quantities of high bandwidth memory, and other hardware to deliver high processing power.
The company’s revenue growth has recently accelerated, with the top line more than doubling year over year in its fiscal 2027 second quarter (which ended July 26). Management already provided fiscal 2028 guidance for 70% growth, which would be a serious feat given how large the company already is.
That 4% drop doesn’t on its own create an incredible buying opportunity. However, it might be a good time to buy the stock if you’ve been planning to anyway.
The more pressing concern is what the market is actually worried about: whether OpenAI’s news is actually bad news for Nvidia. There’s some risk there that investors should keep in mind.
Nvidia stock is well-priced right now, trading at less than 14 times forward one-year earnings. I wouldn’t make it the central component of your portfolio, but Nvidia looks like a buy right now.
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Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
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