Currently, geopolitical uncertainty is dominating Wall Street headlines. However, beneath the surface the AI industry remains scorching hot. Below is the latest evidence:
OpenAI Valuation, Revenues Soar
While most public artificial intelligence companies are public “pick and shovel” plays, some of the fastest-growing AI companies remain private. This week, evidence emerged from these private companies that AI investment demand remains robust. Tuesday, ChatGPT-parent OpenAI announced that its latest fundraising round received $122 billion in committed capital, making it the largest private funding round in history. The latest investment means that OpenAI’s valuation has soared to a whopping $852 billion.
An $852 billion post-money valuation means OpenAI is worth more than every S&P 500 company except 12. Meanwhile, the rapid growth of OpenAI illustrates that the AI revolution is on track to be the most disruptive, fastest-growing technology ever. Meanwhile, OpenAI is now generating $2 billion in revenue per month. Additionally, the company says enterprise now makes up 40% of revenue and expects that to rise to 50% by year-end. Alsom, its ads pilot reached a $100 million annualized revenue run rate just six weeks after launch. Ark Invest’s (ARKK) Cathie Wood announced a significant investment in OpenAI this week as well. OpenAI now comprises ~3% of the ARKK ETF.
Anthropic Valuation Reaches $600 Billion
Although OpenAI is the first-mover in the industry, Anthropic is currently the fastest-growing AI company. Recently, the company disclosed a mind-boggling $14 billion annualized revenue run rate – a 14x year-over-year increase. The rapid growth is driven by the breakout success of “Claude Code”, signaling a shift from chatbots to Agentic AI. Anthropic is currently the leader in enterprise AI and is expected to go public in Q4 2026. The latest funding round shows that Anthropic’s valuation has ballooned 50% to $600 billion. Although Anthropic is privately held, SK Telecom (SKM), an early Anthropic investor, gives public investors a means to invest in Anthropic pre-IPO.
AI Valuations are Very Cheap, Growth is Hot
NVIDIA (NVDA), the undisputed AI leader and an industry bellwether, has its lowest forward PE ratio in 7 years.
Image Source: Bloomberg
Meanwhile, AI pick and shovel stocks like Nebius (NBIS) and Sandisk (SNDK) are expected to grow revenue at a triple digit pace in 2026.
Image Source: Zacks Investment Research
Bottom Line
While geopolitical tensions may provide a constant drumbeat of anxiety for the average investor, the underlying fundamentals of the AI sector tell a much different story. We are witnessing a rare moment where private market valuations are soaring and public bellwethers remain historically undervalued.
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NVIDIA Corporation (NVDA): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).