OpenAI has $50 billion in revenue instead of $70 billion, markets dropped. How serious is this new information?
Yesterday Financial Times reported that OpenAI's annualized revenue is about $50 billion instead of the originally stated $70 billion. The market immediately reacted with a sell-off in tech stocks. Nasdaq lost 1.25%, the semiconductor sector about 3.4% and Nvidia almost 3%.
But there is one important detail: OpenAI didn't actually lose $20 billion in revenue, the difference arose only from a different way of reporting it. While Anthropic includes sales made through cloud partners, OpenAI reports only its share for some of these sales. So the original $70 billion was an adjusted figure used for comparing the two companies, not the actual reported revenue.
So it's not that AI demand suddenly dropped. But there are signs that the market is becoming increasingly sensitive to any doubts about whether the huge investments in AI infrastructure will bring the expected returns.
An interesting example is Applied Optoelectronics $AAOI , whose shares lost almost 14%.
The company makes high-speed optical transceivers that enable huge amounts of data to be transferred between servers and network equipment in data centers. So it is one of the important parts of infrastructure without which the most advanced AI systems couldn't communicate effectively.
And fundamentals so far show fairly strong growth. In Q2 its revenue rose about 86% year-over-year to $192 million. Management also plans to increase production capacity of the most advanced 800G and 1.6T products from about 200 thousand to 650 thousand units per month by the end of the year. According to their estimates, demand should exceed production capacity at least until mid-2027.
There are still fairly big risks
$AAOI recently completed an issuance of about 5.7 million new shares, raising almost $588 million. The money will help finance growth, but at the same time shareholders are being diluted. The company also still reports a GAAP loss and its gross margin fell year-over-year from 30.3% to 27.7%.
I would mainly watch whether it can actually turn the planned production expansion into higher revenue, better margins and positive cash flow. Growth in production capacity alone doesn't guarantee success.
How I see the whole thing
The OpenAI report alone doesn't justify such a sell-off in AI infrastructure. However, one must distinguish between strong demand for products and the price investors are willing to pay for future growth. At today's expectations, fundamentals don't even have to worsen. Sometimes it's enough that growth won't be as fast as the market expects. Moreover, yesterday's sell-off was also influenced by higher oil prices and uncertainty around interest rates.