Meta, Nvidia, CoreWeave Face Make-or-Break Moment in AI Race

Analyzing the appeal of AI-related stocks – companies like Meta, Nvidia, and CoreWeave continue to demonstrate long-term strategic advantages.

In 2025, the landscape of leading artificial intelligence stocks is evolving, with investor attention shifting toward emerging players like CoreWeave (CRWV). While semiconductor giants once dominated the AI space, software firms are increasingly gaining traction—evidenced by Snowflake (SNOW), which has surged 34% year to date.

Undoubtedly, leading AI stocks like Microsoft (MSFT) and Nvidia (NVDA) carry immense expectations. For numerous companies—including Alphabet (GOOGL), Amazon (AMZN), and Meta Platforms (META)—the emergence of generative AI presents a complex mix of significant risks and promising opportunities.

With the surge of generative AI—capable of creating text, images, and video—it’s wise to approach the hype with caution, particularly in light of recent events involving Super Micro Computer (SMCI).

Numerous companies are now eagerly promoting AI-driven product roadmaps. As a rule, prioritize AI stocks that leverage artificial intelligence to enhance their offerings or secure a competitive advantage.

Oracle Pops On AI-Driven Cloud Outlook

Oracle (ORCL) stood out among AI stocks after its strong fiscal fourth-quarter results and optimistic guidance, with its shares climbing 29% in 2025.

As a key indicator for AI stocks, chipmaker Nvidia reported its first-quarter earnings on May 28. Despite setbacks from U.S. trade restrictions impacting its China business, the AI accelerator leader exceeded Wall Street’s sales and earnings expectations for the quarter ending April 27.

Moreover, Nvidia’s stock has rebounded 5% in 2025 following a nearly 20% decline. The company is targeting expansion beyond major tech firms by pursuing "sovereign AI" initiatives—strategic partnerships with governments.

Nvidia’s stock climbed following news that the company will provide AI accelerators to Humain, Saudi Arabia’s new AI-focused subsidiary of the Public Investment Fund, which is developing a 500-megawatt AI data center. Additionally, Nvidia is setting its sights on expanding into European markets.

Margin pressure has been a significant challenge for Nvidia as it scales up production of its next-generation Blackwell AI chips in 2025. At GTC, Nvidia unveiled updates to its AI accelerator roadmap. However, considerable uncertainty remains over whether customers will truly require the 'Rubin Ultra' GPUs in 2027 and the 'Feynman' GPUs in 2028.

Meta's Big Bet On Scale AI

Meanwhile, Meta stock has gained 16% in 2025.

Meta is actively reshaping its AI strategy, planning to invest $14.9 billion to acquire a 49% stake in Scale AI. The startup specializes in data labeling services essential for training large language models. As part of the deal, Scale AI’s CEO, Alexandr Wang, will join Meta’s newly established AI research lab focused on advancing "superintelligence."

During Meta’s Q1 earnings call, CEO Mark Zuckerberg outlined five key pillars driving AI growth: enhanced advertising, immersive social media experiences, business messaging, the Meta AI app, and AI-powered devices such as spatial computing.

In April, the social media giant launched the Meta AI app, powered by its Llama 4 training model, featuring chatbot and web search capabilities. Prior to this, Llama technology had already been integrated into Meta’s popular apps like Instagram and WhatsApp.

In April, Meta unveiled its open-source Llama 4 AI model family. However, the company has postponed the release of its most powerful variant, Llama 4 Behemoth.

CoreWeave, Palantir Stand Out

CoreWeave, an AI cloud services provider backed by Nvidia, went public with an IPO in March and reported its first earnings as a public company on May 14. The company projected capital expenditures above expectations as it scales up capacity to serve a growing customer base. With Nvidia holding a 7% stake, the chipmaker plays a crucial role in CoreWeave’s growth and future prospects.

Both Nvidia and CoreWeave remain on the IBD Leaderboard.

Bank of America on June 16 downgraded  CoreWeave stock to neutral.

"A significant debt funding ramp is still needed to support capital spending build out," said BofA analyst Brad Sills in a report.

Additionally, data analytics firm Palantir reported its first-quarter earnings on May 5. The company’s stock has surged 81% in 2025, following an impressive 340% rally last year.

Although software companies have been cautious in monetizing AI products so far, many analysts remain optimistic about their long-term growth potential.

Software Makers Ramp AI Agents

Palantir, along with Snowflake and the privately held Databricks, is dedicated to enabling companies to leverage their proprietary data for developing custom AI models. Let’s take a closer look at Databricks’ strategy.

Snowflake and Databricks are actively pursuing acquisitions to strengthen their competitive positions. However, Databricks has yet to reveal any plans for an initial public offering.

In an interview with IBD, ServiceNow (NOW) CEO Bill McDermott discussed the company’s ambitions to become a leader in AI. Recently, the enterprise software provider set ambitious AI revenue targets for fiscal 2026.

Meanwhile, software giant Salesforce (CRM) has agreed to acquire Informatica (INFA) for $8 billion to strengthen its AI strategy. Despite this move, Salesforce’s stock has fallen 22% year to date.

Apple Stock Lags, Google I/O

Apple’s stock has underperformed in 2025, dropping 21%. Additionally, the company held its flagship Worldwide Developers Conference on June 9, which revealed no major surprises regarding its AI initiatives.

As the iPhone 17 models prepare for their September 2025 launch, significant enhancements to Apple’s intelligence features seem unlikely. Notably, the voice assistant Siri has yet to receive upgrades powered by advanced AI technology.

Amid concerns about intensifying AI competition, Google’s stock has declined 7% in 2025. However, its Q1 earnings offered some positive momentum on the AI front. Recently, Google launched the Gemini 2.5 AI model, which has received favorable reviews.

The latest Gemini 2.5 model family formed the backbone of most Google I/O product announcements. According to Google, the Gemini app now boasts 400 million monthly active users.

AI Stocks: Cloud Computing

Meanwhile, robust revenue growth among cloud computing giants has been a key theme, driven by soaring capital investments in AI infrastructure. On April 24, Google’s cloud division reported a 28% increase in revenue, meeting market expectations.

Microsoft exceeded Wall Street’s fiscal third-quarter expectations, driven by robust sales in cloud computing and AI services. Azure’s cloud revenue growth accelerated to 35% in constant currency, up from 31% the previous quarter. As a result, Microsoft’s stock has gained 12% in 2025.

Microsoft is the largest investor in generative AI leader OpenAI, having committed approximately $14 billion to the startup. Its cloud business gains significant advantages by supporting OpenAI’s ChatGPT services.

Meanwhile, Amazon’s cloud revenue growth slowed to 17%, down from 19% in the previous quarter. Consequently, Amazon’s stock has declined 3% in 2025.

Within the data center infrastructure sector, Arista Networks (ANET) reported earnings on May 6. The company’s stock has declined 16% year-to-date. Below is an interview with Arista CEO Jayshree Ullal discussing the firm’s AI strategy.

AI Stocks: Semiconductor Plays

Meanwhile, AI chip export restrictions continue to pose uncertainty for semiconductor companies as the Trump administration reviews its policy options regarding China.

In mid-June, Advanced Micro Devices (AMD) held its Advancing AI event, unveiling updates to its AI strategy. Notable customers include OpenAI, Oracle, Meta, and xAI, with recent speculation hinting at potential collaboration with Amazon Web Services.

Broadcom (AVGO) is currently providing custom AI chips for major players like Google, Meta, and ByteDance, TikTok’s parent company. Analysts note it has four additional potential customers, including Apple, OpenAI, and xAI. Broadcom’s fiscal Q2 earnings exceeded expectations, with its AI segment standing out as a key driver.

Other notable AI chipmakers to keep an eye on include Qualcomm (QCOM), ARM Holdings (ARM), and Marvell Technologies (MRVL).

DeepSeek Roils AI Stocks

Meanwhile, OpenAI secured a valuation of $300 billion through a $40 billion fundraising round led by SoftBank. The company specializes in developing large, multimodal foundation models.

Investors should closely monitor the intense competition among AI models, which are vying in areas such as reasoning, multimodal capabilities, and computational efficiency. Large language models serve as the foundational building blocks for developing advanced AI applications.

Anthropic’s most recent funding round has propelled its valuation to $61.5 billion.

China-based DeepSeek is preparing to launch the next iteration of its open-source models.

IBD offers insight into the critical questions surrounding DeepSeek, including the AI rivalry between the U.S. and China. Meanwhile, Alibaba Holdings (BABA) is advancing its Qwen AI models, while Baidu (BIDU) continues to develop its Ernie AI models.

The commoditization of AI models is expected to accelerate application development. Although "training" AI models has driven the majority of capital expenditures so far, the market is likely to shift its focus toward "inferencing"—the deployment and operation of AI applications—over the long term.

AI Stocks To Watch By Industry Group