OpenAI Is Reportedly Raising $30 Billion. Which Chip Stock Gains the Most?

Source The Motley Fool

Key Points

  • OpenAI is reportedly seeking around $30 billion in a round that might value it at over $1.4 trillion.

  • Nvidia agreed to guarantee up to $105 billion of obligations at an Ohio campus that OpenAI will lease.

  • Broadcom expects OpenAI to become its second-largest custom-chip customer in 2028.

  • Motley Fool Issues Rare "Total Conviction" Buy Alert ›

OpenAI is raising cash again. The ChatGPT maker is seeking around $30 billion in a round that might value it at over $1.4 trillion, Reuters said on Oct. 19. That's up from an $852 billion valuation in March. The talks are still ongoing, though, so nothing's closed.

For chip investors, the bigger number might be what OpenAI has already lined up. In 2025, it announced plans for 26 gigawatts of computing capacity with Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD), and Broadcom (NASDAQ:AVGO). By comparison, OpenAI is reportedly pitching investors on annualized revenue of around $50 billion.

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In other words, new cash directly affects whether those plans get paid for. And each of these chip stocks has a different amount riding on it.

The ChatGPT logo on a smartphone in front of the OpenAI logo.

Image source: Getty Images.

Nvidia's growth doesn't rely on OpenAI

Nvidia's September 2025 letter of intent covered at least 10 gigawatts of its systems, and Nvidia planned to invest up to $100 billion in OpenAI as each gigawatt was deployed.

The backing has since changed form. Nvidia put $30 billion into OpenAI's March round. Then in August, it agreed to guarantee up to $105 billion of obligations at an Ohio data center campus that will house Nvidia hardware under 20-year leases to OpenAI. The first guarantees aren't expected to take effect until fiscal 2029, and Nvidia's exposure drops as OpenAI pays its rent.

A well-funded OpenAI, then, lowers the odds that guarantee ever costs Nvidia anything.

Showing how much is at stake, Nvidia said every generation of its systems at that one site could mean $150 billion to $200 billion in revenue. Yet Nvidia isn't waiting on OpenAI. Its revenue climbed 106% year over year to $96.2 billion in the fiscal 2027 second quarter, which ended July 26.

Based on the consensus estimate for fiscal 2028 (the year through January 2028), Nvidia's price-to-earnings ratio is about 14 with shares near $217 as I write. I think that's a modest price for this much growth.

AMD: the most exposed of the three

AMD's Oct. 6, 2025, deal covers 6 gigawatts of its graphics processing units (GPUs), starting with 1 gigawatt in the second half of 2026. Chief financial officer Jean Hu put the expected payoff at "tens of billions of dollars in revenue for AMD."

"We are very happy with our strategic anchor customers in OpenAI, Meta, and Anthropic. They are all in the process of ramping," CEO Lisa Su said on AMD's second-quarter earnings call in August.

Meta Platforms signed a matching 6-gigawatt deal, while Anthropic's covers up to 2 gigawatts. That leaves OpenAI with around 43% of the gigawatts across AMD's three anchor customers. And management expects data center revenue to more than double in 2027, after second-quarter sales for the segment climbed 107% year over year to $6.7 billion.

The stock already prices much of that in. At roughly $539 as I write, AMD's price-to-earnings ratio on 2027 consensus estimates is near 34 -- more than twice Nvidia's.

Broadcom is still waiting on the financing

Broadcom's 10-gigawatt deal announced Oct. 13, 2025, has OpenAI designing its own artificial intelligence (AI) chips and Broadcom developing and deploying them through 2029.

Broadcom shipped Jalapeño, OpenAI's first custom accelerator, in the quarter ending Aug. 2. On the Sept. 2 earnings call, CEO Hock Tan said Jalapeño is on track for 1.3 gigawatts of deployments in 2027. And he sees OpenAI deploying over 5 gigawatts in 2028, enough to make it Broadcom's second-largest custom-chip customer.

That's when Broadcom's forecast makes its biggest dollar jump. Management expects AI chip revenue to about double to $115 billion in fiscal 2027, then double again to $230 billion in fiscal 2028.

But the money behind OpenAI's deployments is less settled. In June, Broadcom set up a financing vehicle with Apollo Global Management and Blackstone for OpenAI and Anthropic, and the first $35 billion goes to Anthropic's expansion. Asked about financing on the call, Tan mentioned Anthropic's path to an initial public offering.

"OpenAI, we still have less clarity, but it's different," he said.

On analysts' fiscal 2027 estimates, Broadcom's price-to-earnings ratio is around 17 with shares near $335 as of this writing.

Which stock gains the most?

Sure, a reported funding round isn't cash in the bank. And $30 billion is small next to OpenAI's chip plans.

Yet if the round closes, I think Broadcom gains the most, because its OpenAI financing is the least settled, and Nvidia arguably gains the least. I'd consider buying all three stocks. But with so much of AMD's plan riding on one customer at over twice Nvidia's price, I'd hold AMD as the smallest position.

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Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Blackstone, Broadcom, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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