AI Stocks Face ‘Show Me’ Moment. Why Amazon, Google Advanced But Meta, Microsoft Sold Off.
The landscape of top artificial intelligence stocks continues to evolve. Amid worries over an AI bubble, investors need to be picky when looking at semiconductor, software and other plays. Among AI stocks in the spotlight are Oracle (ORCL), Nvidia (NVDA), Palantir (PLTR), CoreWeave (CRWV) and Snowflake (SNOW).
To be sure, top AI stocks such as Nvidia face high expectations. For many companies — such as Google parent Alphabet (GOOGL), Amazon.com (AMZN), Facebook parent Meta Platforms (META) and Microsoft (MSFT) — the rise of generative AI poses both risk and opportunity.
Many companies suddenly tout AI product roadmaps. In general, look for AI stocks that use artificial intelligence to improve products or gain a strategic edge.
AI Stocks: Capital Spending In Focus
What’s clear is that investor worries over a tech bubble similar to 1999 have increased amid vendor financing issues and the securitization of loans to data center infrastructure builders. Apple (AAPL), Microsoft, Meta, Alphabet and Amazon reported earnings in late October. Shares in Amazon, Apple and Google climbed while Meta stock and Microsoft pulled back.
All the companies raised their capital spending guidance for 2025 while capex dollar growth is expected to be higher in 2026 for Meta and Microsoft.
Investors may parse AI stocks in terms of what companies have a stronger balance sheet to fund data center buildouts, says Michael Nathanson, analyst at MoffettNathanson in a report.
“Meta’s capex as percentage of revenue is estimated to hit a cycle high of 47% in 2026 while Alphabet’s will remain handily above 20% for the foreseeable future,” he said.
Nathanson added: “Of the two companies, Alphabet’s ability to spread this capex across their quickly growing cloud business, YouTube platform and search advertising creates a more return-on-investment efficient path forward than Meta which is reliant on core advertising monetization and a nascent AI business that includes devices.”
Meta Stock Pressured
Meta told analysts that given the uncertainty around the timing of AI superintelligence, the company aims to front-load cloud capacity to prepare and may allocate excess to core business operations if it does not materialize.
Like Oracle, Meta is borrowing to finance its AI data center build out. And, Meta has an off balance sheet deal with Blue Owl Capital.
In Q3, Google reported cloud-computing revenue climbed 33.5% to $15.16 billion. And, Google Cloud’s order backlog jumped 82% from a year earlier to $155 billion.
Amazon Web Services revenue rose 20% to $33 billion. Microsoft’s Azure cloud business posted lower-than-expected revenue. Microsoft said its Azure cloud unit still has capacity constraints.
OpenAI Launches New Product Wave
OpenAI, a leader in developing AI systems, is making plenty news. Further, OpenAI has unveiled an artificial intelligence powered web browser called ChatGPT Atlas. In early October, OpenAI unveiled new capabilities for building apps inside ChatGPT. Further, ChatGPT users will be able to launch apps by starting a message with the name of an available app. In addition, ChatGPT will suggest apps when they are relevant to an ongoing conversation.
OpenAI recently introduced the Sora 2 video app, which will provide competition for Meta and others. OpenAI has been leveraging its newest AI models, including GPT-5. Also, OpenAI has released a new feature that enables ChatGPT users to purchase items directly within the chatbot interface. OpenAI recently launched five agents targeting use cases such as contract review, personalized sales responses, customer support and ticket handling — pressuring software stocks.
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Meanwhile, a group of investors recently paid about $6.6 billion to buy shares owned by OpenAI employees, valuing the company at $500 billion. Also, OpenAI has become one of the world’s most valuable startup, overtaking Elon Musk’s SpaceX.
In the secondary market, OpenAI shares are sold on Forge Global, EquityZen and Zanbato and other platforms that trade private company equity.
Nvidia Makes Big OpenAI Investment
A bellwether for AI stocks, chip maker Nvidia has advanced 50% in 2025, rebounding from a big sell-off tied to China-based DeepSeek’s AI models.
Nvidia announced plans to invest up to $100 billion in OpenAI. As part of the deal, OpenAI will make cash purchases of Nvidia’s advanced hardware systems. Nvidia will take an equity stake in OpenAI.
The first $10 billion of Nvidia’s investment will be deployed at the completion of the first gigawatt of AI systems deployed in new data centers, which OpenAI said would occur in the second half of 2026, around the time Nvidia’s Vera Rubin platform will roll out. Nvidia will invest up to $100 billion in OpenAI progressively as each data center gigawatt is deployed.
Meanwhile, Broadcom (AVGO) stock has advanced 59% in 2025. Broadcom also has signed a big deal with OpenAI, analysts say. Further, when reporting Q2 results, Broadcom issued a strong outlook on AI chip sales.
Meanwhile, AMD stock surged on the new OpenAI deal. Under the deal, OpenAI will deploy six gigawatts of AMD AI systems over several years beginning in late 2026. AMD stated the deal could be a $100 billion revenue opportunity in the long run. Also, AMD stock has advanced 112% this year.
AI Stocks To Watch: Palantir, Cloudflare, CrowdStrike
Among AI stocks to watch: Palantir stock has gained 165% in 2025. Palantir stock hit a new record high on Oct. 31. Despite investor worries over AI internet search competition, Google stock is up 48% in 2025. Microsoft stock has advanced 22%.
Shares in CrowdStrike Holdings (CRWD) have gained 58% in 2025. CrowdStrike aims to be a leader in AI cybersecurity.
Meanwhile, shares in Cloudflare (NET) have shot up 135% in 2025. To protect their content, Cloudflare recently began giving web domains the option to block AI crawlers. Here’s an interview with Cloudflare Chief Executive Matthew Prince.
CoreWeave stock has advanced 232% this year but shares pulled back following the expiration of its IPO lock-up and earnings report. CoreWeave stock hit an all-time high on June 20, with shares up 367% at that point.
Further, CoreWeave is a new AI cloud services provider that rents out Nvidia GPU-equipped servers. Its customers include OpenAI, Microsoft and Nvidia. Meta also plans to buy more AI cloud capacity from CoreWeave.
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Other new AI cloud infrastructure providers, also called “neoclouds,” include Nebius (NBIS), Lambda, Crusoe and Nscale. Lambda is expected to launch an initial public offering.
Meanwhile, Oracle stock has gained 57% in 2025. Oracle stock soared Sept. 10 on its guidance for future contract revenue.
Among data center infrastructure plays, Arista Networks (ANET) has shot up 42% this year. Arista stock gained following the company’s Q2 earnings report. Here’s an interview with Arista Chief Executive Jayshree Ullal on its AI strategy.
Ciena (CIEN), Credo Technology (CRDO) and Lumentum (LITE) also have advanced on robust internet data center orders.
“Scale-up” networking is a big trend for AI stocks, says Morgan Stanley.
“The scale-up network refers to high-speed communication between GPUs/accelerators in the same server or rack. Interconnecting accelerators allows them to function as one large supercomputer, accessing the same memory and processing the same workload,” said a Morgan Stanley report.
AI Stocks: Software Companies Lag
Having struggled to generate new revenue from “copilots,” software companies are now turning to autonomous, goal-driven AI agents. One big issue for software companies is how fast customers ramp up pilot programs to commercial deployment.
Software companies that help customers clean up and organize their proprietary data to train AI models and build AI apps have out-performed.
Palantir — as well as Snowflake and privately held Databricks — are data management software plays. Here’s a look at Databrick’s strategy. Snowflake stock has advanced 78% this year. Snowflake reported better-than-expected Q2 earnings.
On the other hand, some big-cap software companies are not the top-performing AI stocks. There’s growing investor angst over the “per seat” licensing business models of some software companies if artificial intelligence improves productivity but results in the elimination of jobs. That potentially means less per-seat software licenses.
Another investor concern is that more companies could develop custom software in-house using generative AI coding tools. And, there’s increasing concern that OpenAI will compete with enterprise software makers.
Salesforce (CRM) stock has retreated 22% in 2025 while ServiceNow (NOW) stock is down 13%.
Adobe (ADBE), Workday (WDAY) and HubSpot (HUBS) are also among software companies in the red this year.
Meta’s Loses Open-Source AI Lead To China
Meanwhile, amid its Q3 earnings sell-off, Meta stock has gained only 10% in 2025.
Meta continues to overhaul its AI strategy. Meta has invested $14.9 billion in Scale AI for a 49% stake in the startup. Scale AI provides data labeling services that help train and produce AI large language models.
Scale AI Chief Executive Alexandr Wang has joined a new AI research lab at Meta dedicated to pursuing “superintelligence.” And, Meta has hired away top scientists from OpenAI, Google and others.
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CEO Mark Zuckerberg has laid out five pillars of expected AI growth. They include improved advertising, engaging social media experiences, business messaging, the Meta AI app, and AI devices, including spatial computing.
The social networking giant in April launched the Meta AI app, built with its Llama 4 training model, with chatbot and web-searching features. Previously, Llama had been embedded in Meta applications such as Instagram and WhatsApp.
Meta in April released its open source Llama 4 AI model family.
On the negative side, analysts say Meta has relinguished its mantle as the leader in open-source AI to Chinese companies, led by DeepSeek.
AI Native Startups Gain Momentum
Apple stock has rebounded and is up 8% in 2025. The company has been losing top AI scientists. According to reports, Apple is developing a new AI-powered web search feature for Siri, powered by a customized version of Google’s Gemini model. On its Q3 earnings call with analysts, Apple teased an AI-enabled Siri coming in 2026.
Investors should keep a close watch on the fierce competition in AI models. Generally, the AI models are battling in reasoning and multimodal capabilities as well as computing needs. Large language models provide the building blocks to develop applications.
Anthropic’s latest funding round values it at $61.5 billion. Amazon is a big investor in Anthropic.
The commoditization of AI models could spur application development. While “training” AI models has been the biggest driver of capital spending, the market will shift to “inferencing,” or running AI applications, in the long run.
According to the State of AI Report 2025, large labs and AI startups are now generating close to $20 billion in annual revenue.
AI Stocks To Watch By Industry Group
Company
Symbol
Comp Rating
Industry name
AI angle
Nvidia
(NVDA)
99
Elec-Semiconductor Fabless
Cloud computing giants buying more chips to train AI models or run AI workloads. Big lead over rival Advanced Micro Devices (AMD).
CrowdStrike
(CRWD)
94
Computer Software-Security
AI chatbots expected to automate more functions in security-operations centers and reduce the time to detect computer hacking.
Arista Networks
(ANET)
99
Computer-Networking
Sells computer network switches that speed up communications among racks of computer servers packed into “hyperscale” data centers. With AI growth, internet data centers will need more network bandwidth.
Microsoft
(MSFT)
93
Computer Software-Desktop
Biggest investor in generative AI startup Open AI, whose ChatGPT users require Azure cloud services. Microsoft’s business AI assistant, Office 365 Copilot, is another potential revenue source.
Salesforce
(CRM)
79
Computer Software-Enterprise
Pivoted to autonomous, goal-driven AI agents from conversational co-pilots. Expected to use a mix of subscription and consumption-based pricing.
Amazon.com
(AMZN)
88
Retail-Internet
Alexa smart assistant upgraded. Cloud computing unit working with OpenAI rivals Anthropic, Hugging Face and Falcon 40B.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, quantum computing, cybersecurity and cloud computing.
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已发布: 2025-11-01 14:15:00
