OpenAI’s upcoming funding round could provide a significant boost to four major technology companies closely tied to the artificial intelligence leader, according to investment firm DA Davidson. The analysts suggest that fresh capital injection and renewed market enthusiasm around OpenAI may serve as a catalyst for stocks including Nvidia, Microsoft, Oracle, and CoreWeave, despite recent underperformance among these OpenAI-connected companies.
DA Davidson analysts, led by Gil Luria, indicated that OpenAI is reportedly nearing another major fundraising round. Recent reports suggest that Middle Eastern sovereign wealth funds may contribute approximately $50 billion to the AI company. Daniel Newman, CEO and analyst at Futurum, told Business Insider that he expects the funding round to push OpenAI’s valuation to between $750 billion and $850 billion.
OpenAI Funding Round Expected to Lift Tech Stocks
The investment firm believes that the upcoming capital raise will reignite market enthusiasm for OpenAI and positively impact related publicly traded companies. According to the analysts, the market has recently assigned negative value to relationships with OpenAI, which they attribute to the underperformance of Nvidia, Microsoft, CoreWeave, and Oracle shares over the past five months.
However, DA Davidson now sees the fundraising round as a potential turning point. The firm upgraded Oracle from Neutral to Buy based on expectations that new OpenAI funding will serve as a positive catalyst for both the stock and general sentiment surrounding the AI ecosystem.
Addressing Concerns About OpenAI’s Financial Position
OpenAI has faced criticism regarding its reliance on debt and mounting competitive pressures in the artificial intelligence sector. The company has partnered with Oracle to construct $500 billion worth of data centers as part of its Stargate project, despite not yet achieving profitability. Additionally, concerns have emerged that Alphabet’s Google Gemini has narrowed the gap in the AI race.
DA Davidson analysts acknowledged their previous skepticism about OpenAI, noting they had been critical of the company for overpromising and requesting government assistance. Nevertheless, they now believe OpenAI has made strategic corrections that position it more favorably for future success.
Strategic Shifts Signal New Direction
The analysts pointed to several positive developments at OpenAI that informed their revised outlook. According to DA Davidson, the company has refocused efforts on its core frontier model and ChatGPT platform while de-emphasizing marginal initiatives. This strategic shift includes plans to introduce advertising, which analysts view as critical for increased monetization and reduced cash burn.
Meanwhile, changes in company management suggest a willingness to align with technology giants like Nvidia, Microsoft, and Amazon rather than compete directly with them. The analysts believe this collaborative approach, combined with fresh capital, will enable OpenAI to fulfill its obligations this year, including commitments to Oracle.
Furthermore, DA Davidson expects that as investor perception of OpenAI improves, the publicly traded companies in its ecosystem could experience significant revaluation. The firm specifically anticipates outperformance in Nvidia and Microsoft shares, along with positive impacts for CoreWeave and Oracle.
Market Appetite Remains Strong
Despite recent challenges, investor interest in OpenAI remains robust. Newman described the appetite for OpenAI among investors he has spoken with as “pretty insatiable,” suggesting strong demand for exposure to the company’s growth potential. In contrast to earlier concerns about the AI company’s financial sustainability, this renewed enthusiasm could benefit secondary keywords related to AI investment and technology partnerships.
The timing and final terms of OpenAI’s next funding round have not been officially confirmed by the company. Market observers will be watching closely to see whether the expected capital infusion materializes and whether it generates the anticipated positive momentum for associated technology stocks.
