Market Trends in AI Stocks
Investors are pulling back from major artificial intelligence stocks due to concerns about valuation and high spending on AI infrastructure. In 2025, only two stocks from the so-called “Magnificent Seven” outperformed the S&P 500, which posted a nearly 16.4% gain. These outperformers achieved returns that at least doubled the market’s performance, raising questions about the sustainability of current winners amid market uncertainty.
Alphabet and Nvidia’s Performance
Alphabet (NASDAQ: GOOG) experienced significant challenges, including a DOJ lawsuit and competition from AI technologies but managed to increase its stock price by nearly 65% last year, far exceeding the market’s gain. Nvidia (NASDAQ: NVDA) faced geopolitical pressures and competition but reported a 62% year-over-year revenue increase in December. Both companies are crucial players in the evolving AI market, but the uncertainty around competition and regulatory issues may impact future growth.
