-- OpenAI continues to see strong enterprise demand, Wedbush Securities said, dismissing growth concerns that surfaced after a report showed that the ChatGPT parent missed its sales targets.
Shares of several chip makers came under pressure Tuesday, including Nvidia (NVDA), Broadcom (AVGO) and Advanced Micro Devices (AMD), as The Wall Street Journal reported that OpenAI recently fell short of its own targets for new users and revenue.
Chief Financial Officer Sarah Friar told other companies that OpenAI may not be able to pay for computing contracts if revenue growth doesn't accelerate, The Journal reported. OpenAI is aiming for an initial public offering, according to media reports.
"Overall, we believe OpenAI has been tracking very high demand on both the consumer and enterprise front and we strongly disagree with the notion that growth is weakening," Wedbush analyst Dan Ives wrote in a client note Tuesday. "We believe that recent concerns around OpenAI are overblown with the company having enough capital to fulfill its compute capacity needs over at least the next three years following the company's recent $122 billion funding round."
The brokerage allayed concerns particularly about Oracle (ORCL), which counts OpenAI among its largest cloud customers. OpenAI in September 2025 signed a deal to purchase $300 billion in computing power from Oracle over a five-year period, The Journal reported at the time.
That deal, which reflects the bulk of Oracle's $553 billion backlog, is expected to drive $30 billion in revenue for the cloud computing company, according to Wedbush.
Oracle shares declined 3.6% in late Tuesday afternoon trade, and have slumped about 14% so far this year.
"We believe the pullback in (Oracle) shares represent a solid buying opportunity with OpenAI set to go public by the end of this year providing the company with fresh access to capital from public markets," Ives said.
Last month, Oracle reported fiscal third-quarter results that surpassed Wall Street's estimates, buoyed by strong demand for cloud computing amid an artificial intelligence boom. Earlier this year, the company said it was planning to raise up to $50 billion to expand its cloud infrastructure business and add capacity to meet demand from some of the largest tech companies.
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