Nvidia and Micron shares bounce as investors get clarity on a key OpenAI matter

By Britney Nguyen

A new report paints OpenAI's financial picture in a more optimistic light

OpenAI, led by CEO Sam Altman, is reportedly on track for annualized revenue of $70 billion on a net basis by the end of the year, according to Bloomberg.

Investors may have reacted prematurely in selling chip stocks over fears about OpenAI's financial position.

Shares of chip makers tied to the artificial-intelligence buildout are set to rise Friday morning, after they declined the previous day. What changed? A new report discussing OpenAI's revenue progress seems to be clarifying issues that had been spooking investors.

Bloomberg reported Friday that OpenAI is eyeing annualized net revenue of $70 billion by the end of the year, mostly on strength in its enterprise business. At the end of September, the company reportedly saw annualized revenue of $50 billion.

The report followed one from the Financial Times on Thursday which said the ChatGPT maker told investors it was approaching $50 billion in annualized revenue at the end of last month. That figure was $20 billion less than the roughly $70 billion figure OpenAI had previously projected, according to the Financial Times. Annualized revenue is found by taking revenue from a month or another short period of time and using it to determine what a company could make in a full year.

Chip stocks fell on Thursday, as OpenAI serves as an important indicator of ongoing demand for AI and therefore of the spending on infrastructure that's required to support the development and deployment of the technology.

Now in Friday's premarket trading, shares of Advanced Micro Devices (AMD) and Nvidia (NVDA) are up 1.7% and 1.4%, respectively. Both companies have partnerships with OpenAI to supply significant amounts of graphics processing units and other infrastructure for training its AI models. Broadcom (AVGO), which is designing a custom chip with OpenAI, is seeing its stock rise 1.9%.

Shares of both Micron Technology (MU) and Sandisk (SNDK) were up 1.8% in early trading. The companies have been major beneficiaries of AI-driven demand for memory and storage components needed to support agentic AI and inference, or the process by which an AI model makes predictions based on what it learned in training.

OpenAI's investors had reportedly tried to compare its annualized revenue with that of rival Anthropic, but because the frontier labs calculate this number differently, that led to inconsistencies, according to the Financial Times.

OpenAI didn't reply to MarketWatch's request for comment on the numbers cited in the Financial Times report.

Both the Financial Times and Bloomberg reported that while Anthropic includes the gross amount of some sales, such as those through its cloud partners, OpenAI only counts its share of revenue generated from its partnerships with cloud providers.

While much of the market has figured out the differences between the net amount and the gross amount, "it's still an expectations issue given the media has always quoted and discussed [OpenAI's] run-rate revenue through a 'net revenue' lens," Jefferies equities trading analyst Jeffrey Favuzza said in a Friday note to clients.

Looking forward, Favuzza said the market will likely "be very excited" once at least one of the AI leaders goes public, which would offer transparency around actual financial data.

-Britney Nguyen

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10-09-26 0921ET