Favorable AI market still has 2-3 years, says Deepwater's Gene Munster

Core Insights - The recent fundraising by OpenAI, which raised significant capital, has positively influenced market sentiment towards AI companies, suggesting a shift in investor confidence [2][3][8] - OpenAI's valuation of $830 billion and projected revenue growth indicate a strong market position, with expectations of doubling revenue in the coming years, leading to a valuation of approximately 12 times its calendar 2026 revenue [3][4][5] - The overall AI sector is experiencing a recovery, with multiple positive data points from companies like Nvidia and AWS contributing to this sentiment [7][8][12] Company-Specific Insights - OpenAI's ability to raise tens of billions demonstrates its strong narrative-setting capability in the public market, countering the notion of "profitless prosperity" in large language models [3][4] - Nvidia has raised its growth forecast for calendar 2026 from 50% to mid-60s, indicating robust demand in the AI sector [8][9] - Google Cloud's impressive growth, with recent figures showing a 14% increase, suggests that if it continues to outperform expectations, it will positively impact the overall AI trade [11][12] Market Dynamics - The AI market is currently not fully reflecting the positive developments and data points that have emerged over the past month, indicating potential for further growth [8][12] - The relationship between OpenAI's prospects and the broader AI trade suggests that improvements in OpenAI's outlook could enhance investor sentiment across the sector [10][11] - There remains a concern among investors regarding the potential for negative data points that could disrupt the current positive momentum in the AI market [13]