Nvidia is down 4% since OpenAI said it has a $50 billion revenue run rate, $18 billion less than the figure previously circulating. For a $5 trillion company, that equals $200 billion. The Motley Fool's Jennifer Saibil writes that the drop on its own doesn't create an incredible buying opportunity.
Nvidia shares are down 4% since 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.
For a $5 trillion company, the 4% decline translates into $200 billion. The market had previously thought OpenAI's run rate was $68 billion.
Why OpenAI's numbers matter to Nvidia
OpenAI recently postponed its plans to go public, so investors don't have access to its financial data beyond what it chooses to disclose. Because it isn't 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.
If OpenAI and rival Anthropic are growing rapidly, they'll likely need more data center processing power. That would benefit Nvidia, which supplies a large fraction of the processors that power data centers. Conversely, if demand for AI accelerator chips looks to be waning, the market sours on Nvidia.
Nvidia's growth and valuation
Nvidia'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.
Saibil says the stock is trading at less than 14 times forward one-year earnings and writes that Nvidia looks like a buy. She also notes there is some risk that OpenAI's news is bad news for Nvidia, which investors should keep in mind.
Source: Motley Fool
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