AI Stocks Face High Stakes as OpenAI Devices Threaten Apple and Tech Giants Respond

AI Stocks Face a 'Show Me' Moment in 2025

The surge in artificial intelligence (AI) stocks has paused in 2025, but some companies like Palantir Technologies (PLTR) continue to perform well. Early in the year, semiconductor stocks led the AI rally, but new contenders are emerging. Industry giants such as Microsoft (MSFT) and Nvidia (NVDA) face high expectations, while firms like Alphabet (GOOGL), Amazon (AMZN), and Meta Platforms (META) see generative AI as both an opportunity and a risk.

Generative AI, which creates text, images, and videos automatically, calls for cautious optimism amid ongoing hype. Recent developments at Super Micro Computer (SMCI) highlight the importance of careful evaluation.

OpenAI’s Move Into Consumer Devices

OpenAI, known for its generative AI models like ChatGPT, is entering the consumer device market. The company agreed to acquire io, a startup led by former Apple designer Jony Ive, for $6.4 billion in stock. Ive’s involvement, given his role in designing the iPhone, signals serious intent. OpenAI CEO Sam Altman described a prototype device as potentially the “coolest piece of technology the world will have ever seen.”

This move may increase competitive pressure on Apple (AAPL), whose stock has dropped 19% in 2025. Apple's AI features in the iPhone 16 didn’t spark major upgrades, and voice assistant Siri has yet to incorporate advanced AI. The upcoming iPhone 17 models could provide a clearer picture of Apple’s AI progress.

CoreWeave and Palantir Stand Out

CoreWeave (CRWV), backed by Nvidia, recently held its IPO and reported first earnings as a public company. It offers AI cloud services by renting Nvidia GPU-equipped servers. Despite a sell-off triggered by a higher-than-expected capital expenditure forecast, CoreWeave’s stock bounced back following Nvidia’s increased stake from 5% to 7%. Since its IPO, CoreWeave shares have climbed 167% as of May 21.

Palantir, a data analytics software company, reported first-quarter earnings on May 5. Its stock has gained 59% in 2025 after soaring 340% last year. Palantir remains a key player in leveraging AI for business analytics, fitting into RBC Capital’s classification of AI stocks as large incumbents and vertical software leaders.

Meta’s Five Pillars of AI Growth

Meta Platforms (META) has seen an 8% stock increase in 2025. CEO Mark Zuckerberg outlined five AI growth pillars during the Q1 earnings call: enhanced advertising, engaging social media experiences, business messaging, the Meta AI app, and AI devices including spatial computing.

Meta launched its AI app in April, based on its Llama 4 model, which integrates chatbot and web search features. The company also released the open-source Llama 4 model family but delayed rolling out the powerful Llama 4 Behemoth variant.

Google’s AI Developments

Google (GOOGL) stock is down 11% in 2025 despite promising AI updates. The release of Gemini 2.5 AI models received positive feedback and supported Google I/O product announcements. The Gemini app now boasts 400 million monthly active users.

Google Cloud reported 28% revenue growth, matching expectations. Meanwhile, Microsoft’s Azure cloud revenue grew 35% in constant currency, beating forecasts and reflecting strong demand for AI and cloud services. Microsoft remains the largest investor in OpenAI, having invested roughly $14 billion.

Nvidia’s Position in AI

Nvidia (NVDA), a key AI stock, faces uncertainty due to changing U.S. chip export rules affecting sales to China. Despite this, Nvidia secured a deal to supply AI accelerators to Saudi Arabia’s Humain, which is building a 500-megawatt AI data center.

Nvidia’s upcoming Q1 earnings report (due May 28) comes after the company outlined its AI accelerator roadmap at the GTC Conference. Production ramp-up for next-gen Blackwell AI chips is underway, but demand for future GPUs like "Rubin Ultra" and "Feynman" remains uncertain.

Competition Heats Up with DeepSeek and OpenAI Funding

OpenAI recently raised $40 billion in a funding round led by SoftBank, valuing the company at $300 billion. This capital supports future AI data center expansions and infrastructure investments. Competition is intensifying between U.S. AI models and open-source alternatives like China-based DeepSeek, especially amid ongoing trade tensions. DeepSeek is preparing new versions of its open-source models, pushing innovation in AI reasoning and performance.

Software Companies Shift to Autonomous AI Agents

Software firms are moving from AI "copilots" to autonomous, goal-driven AI agents. The challenge lies in moving from pilot projects to full commercial adoption. Companies like Palantir, Snowflake, and Databricks focus on enabling clients to build custom AI models using proprietary data.

Snowflake’s stock has risen 12% in 2025. ServiceNow (NOW) has set ambitious AI revenue targets for fiscal 2026, while Salesforce (CRM) posted disappointing Q4 earnings despite expanding AI agent offerings.

As AI models become commoditized, application development will shift from training models to running AI applications ("inferencing"). Export restrictions on AI chips remain a wildcard for Nvidia and Advanced Micro Devices (AMD).

AI Stocks to Watch by Industry Group

• Nvidia (NVDA) – Leading chipmaker for AI workloads, dominant over AMD.
• CrowdStrike (CRWD) – Security software using AI chatbots to automate threat detection.
• Arista Networks (ANET) – Network switches for hyperscale data centers, essential for AI data traffic.
• Microsoft (MSFT) – Major OpenAI investor; Azure cloud powers AI services and Office 365 Copilot.
• Salesforce (CRM) – Transitioning to autonomous AI agents with hybrid pricing models.
• Amazon (AMZN) – Alexa upgrades and cloud partnerships with AI startups like Anthropic and Hugging Face.

Will Startups Challenge Tech Giants?

The big question is whether established tech firms will dominate generative AI or if startups will take the lead. OpenAI’s annual revenue run-rate rose to $3.4 billion recently. The company plans to adopt a for-profit business model in 2025.

Large language models (LLMs) form the base for many AI applications by helping systems understand human language. Access to vast training data remains a competitive advantage. Alongside OpenAI, startups like AI21 Labs, Anthropic (valued at $61.5 billion), and Cohere are key players to watch.

For finance and marketing professionals, staying informed on these developments helps identify AI investment opportunities and market shifts. For those interested in deepening their AI knowledge, Complete AI Training offers courses covering the latest in AI technology and applications.