Jensen Huang's Nvidia Lost $200 Billion in Value After OpenAI's Revenue Run Rate Came Up $18 Billion Below Expectations. Is This AI-Jitters Sell-Off a Buying Opportunity?
The market's fears are real.
In April 2023, Nvidia's market value dropped by $200 billion following OpenAI's revenue run rate coming in $18 billion below expectations. OpenAI's AI model, ChatGPT, launched four years ago and revolutionized the AI landscape, leading to the emergence of multiple competing models. Despite not going public, investors still monitor its growth rates to gauge AI development.
OpenAI disclosed a $50 billion revenue run rate, $18 billion less than previously estimated. This news caused a drop in Nvidia's stock, which is down 4% since the announcement, translating to a $200 billion loss for the company. Nvidia's chips are crucial for AI functions, powering high-level inference and reasoning. The company recently launched its latest platform, Vera Rubin, combining GPUs, CPUs, high bandwidth memory, and other hardware to deliver high processing power.
Nvidia's revenue growth has accelerated, with a more than doubling year-over-year in fiscal 2027 Q2. Management provided fiscal 2028 guidance for 70% growth. While the 4% drop doesn't create a significant buying opportunity, it may be a good time to invest if already planned to do so. Nvidia's stock is well-priced, trading at less than 14 times forward one-year earnings.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
