The Best Way to Invest in OpenAI and ChatGPT Before Its IPO

Microsoft is said to own about 27% of OpenAI, implying an estimated stake value of roughly $230 billion based on OpenAI's $852 billion valuation. The article argues Microsoft trades at a near decade-low operating P/E, framing the stock as a discounted way to gain exposure to OpenAI and ChatGPT ahead of a potential IPO later this year or next year. Overall, the piece is a bullish valuation commentary rather than new company-specific financial results.

Analysis

The market is likely still underpricing how much MSFT’s OpenAI economics can matter at the margin relative to the core business. The key second-order effect is not just ownership value, but distribution power: if OpenAI remains structurally tied to Microsoft’s cloud, tooling, and enterprise stack, Azure can capture the monetization layer even if OpenAI’s equity value is only partially realized later. That makes MSFT a cleaner public proxy than the private asset itself, but also means the upside is slower-burning and tied to capex conversion rather than headline AI enthusiasm.

The real inefficiency here is valuation compression: if investors are paying a historically depressed multiple for the operating business while implicitly assigning little to the OpenAI stake, then the market is treating the AI option as non-economic. That can persist for quarters if AI infrastructure spend continues to pressure near-term margins, but it becomes fragile once OpenAI’s financing needs force a more public mark or a monetization event. A re-rating could happen fast if the market starts capitalizing MSFT on ex-OpenAI earnings plus a transparent mark for the stake.

The contrarian risk is that the embedded value is too easy to overstate. Private marks at late-stage funding levels are not fungible, and any OpenAI IPO could come with dilution, governance friction, or a lower clearing valuation than implied by the last round. In that case, the market could discover that the "free option" is worth less than assumed while still having already paid for the AI infrastructure buildout through capex and operating expense.

Relative beneficiaries beyond MSFT are the picks-and-shovels AI suppliers, especially NVDA and potentially INTC if enterprise AI spending broadens beyond a single cloud stack. If OpenAI needs more capital and compute, the incremental winners are the firms selling GPUs, networking, and server integration, not the app-layer names with no pricing power. NFLX is largely irrelevant here despite the article’s marketing framing; the right lens is AI infrastructure concentration, not generic mega-cap tech exposure.

Key Decisions for Investors

• Long MSFT on a 3-6 month horizon versus the S&P 500: buy on any post-earnings weakness or AI-capex scare; target 12-18% upside if the market begins capitalizing the OpenAI stake more explicitly, with downside limited by the core software franchise.
• Pair trade: long MSFT / short a basket of AI-adjacent software names with weaker monetization visibility over 3-6 months; the thesis is that capital will continue to concentrate in the platform owner with direct distribution and equity exposure rather than secondary beneficiaries.
• Tactical long NVDA vs MSFT into any OpenAI funding/IPO headlines over 1-3 months: if the market re-prices OpenAI growth, compute demand should show up first in GPU orders; risk/reward is better for NVDA momentum, but use MSFT as the lower-beta anchor.
• Avoid chasing MSFT after a sharp gap-up on OpenAI IPO rumors; the trade is better expressed on pullbacks because the catalyst is likely months away and valuation support only improves if the operating multiple stays compressed.
• Optionality trade: buy medium-dated MSFT calls financed by selling out-of-the-money puts if implied vol remains moderate; this captures upside from an OpenAI mark event while using the core business valuation as a cushion.