These 4 stocks are set to get a boost from renewed OpenAI hype, according to DA Davidson

• OpenAI is reportedly in talks for another big funding round, which could reignite the hype around the ChatGPT maker.
• DA Davidson says the fresh funding will serve as a positive catalyst stocks in OpenAI's orbit.
• The firm flagged CoreWeave and three other companies that could ride a new wave of enthusiasm.

OpenAI's next funding round could be good news for four Big Tech stocks with links to the ChatGPT creator, DA Davidson says.

OpenAI isn't publicly traded — at least not yet — but DA Davidson says a fresh wave of hype is coming on the heels of its next fundraising round, and it could could boost four stocks in its orbit.

"We have been very critical on OpenAI overpromising, asking for government handouts and being spread too thin," DA Davidson analysts, led by Gil Luria, wrote about the AI company.

"We believe OpenAI's behavior led to the underperformance in shares of NVDA, MSFT, CRWV and especially ORCL over the last 5 months."

OpenAI is reportedly closing in on another fundraising round, with recent reports suggesting a $50 billion investment from Middle Eastern sovereign wealth funds is in the works.

Futurum CEO and analyst Daniel Newman told Business Insider that they expect the next funding round will bring OpenAI's valuation to $750 billion to $850 billion.

The analyst described the appetite for OpenAI in his conversations with investors to be "pretty insatiable."

DA Davidson analysts wrote that they expect that yet another multibillion-dollar OpenAI funding round will reignite enthusiasm for the company and lift some connected AI stocks.

"Since the market is currently assigning the OpenAI relationship a negative value, we believe the fundraise will serve as a catalyst for outperformance," they wrote of Oracle, CoreWeave, Nvidia, and Microsoft.

OpenAI has come under fire for its reliance on debt and growing competition challenging its dominant position.

The company is partnered with Oracle to build $500 billion of data centers as part of its Stargate project. OpenAI has yet to turn a profit.

Another concern weighing on OpenAI is the notion that Alphabet's Google Gemini has caught up in the AI race.

"We believe that a revamped OpenAI will return to its position as Google's top challenger and with a fresh stack of capital be able to live up to its obligations this year, including to Oracle," they said.

The analysts upgraded Oracle to Buy from Neutral on their expectation that new funding for OpenAI will be a positive catalyst for the stock as well as general sentiment about OpenAI and the connected players.

"We expect that as investors go back to seeing OpenAI as a winner, the public companies in its orbit could re-rate significantly. Most importantly that should drive outperformance in NVDA and MSFT, but also in CRWV, and even ORCL, which we are upgrading today based on our updated view on OpenAI,"

Their more bullish stance on OpenAI comes after the company corrected course.

"OpenAI has started focusing on its core frontier model and ChatGPT, while de-emphasizing some marginals initiatives. This includes going down the path of turning on ads, which will be critical for increased monetization and reduced cash burn."

They also noted a shift in the company's management that suggests they see a need to align with Nvidia, Microsoft, and Amazon, rather than compete.