The AI industry has seen significant developments in recent times, with major players experiencing stock fluctuations due to various factors such as antitrust litigation, market volatility, and competition. Alphabet and Meta Platforms have seen their stocks drop by 27% and 32% respectively, but their AI efforts are expected to create new core businesses. Meanwhile, Nscale is aiming to raise $2.7 billion to build AI infrastructure, and Dataminr has secured $100 million in funding to accelerate its AI push. Cathie Wood has increased her stake in Palantir, believing it has the potential to disrupt Microsoft's dominance in the AI market. Other companies such as SoundHound AI, Nvidia, and Lightrun are also making significant strides in the AI space. Additionally, Anthropic has formed an Economic Advisory Council to guide research into AI's effects on labor markets and the global economy. Despite the fluctuations, many of these companies are expected to continue growing and innovating in the AI space.
Key Takeaways
- Alphabet and Meta Platforms' stocks have dropped by 27% and 32% respectively due to antitrust litigation and market volatility.
- Nscale aims to raise $2.7 billion to build AI infrastructure and meet the growing demand for AI compute.
- Dataminr has secured $100 million in funding to accelerate its AI push and expand its international footprint.
- Cathie Wood believes Palantir has the potential to disrupt Microsoft's dominance in the AI market.
- SoundHound AI's revenue doubled in the fourth quarter of 2024, but its stock valuation is not supported by profits.
- Nvidia's shares have been volatile amid reports of Huawei preparing to launch its own AI chips.
- Lightrun has raised $70 million to develop its AI-powered code correction technology.
- Anthropic has formed an Economic Advisory Council to guide research into AI's effects on labor markets and the global economy.
- Meta Platforms' AI leadership and access to user data give it a significant edge in training AI models.
- The AI industry is expected to continue growing and innovating, with many companies making significant strides in the space.
Alphabet and Meta Stocks Drop 27 and 32 Percent
Alphabet and Meta Platforms, two top AI companies, have seen their stocks drop by 27% and 32% respectively due to antitrust litigation and market volatility. Despite this, investors are advised not to panic as the companies' AI efforts could create new core businesses. Alphabet's AI opportunities include AI-fueled growth in the cloud, autonomous ride-hailing, and quantum computing, while Meta's AI integrations throughout its social media apps and existing ad business are showing promise. The dips in these stocks have left them trading at reasonably compelling valuations, with Alphabet's price/earnings-to-growth ratio at 1.2 and Meta's at 1.4.
Nscale Aims to Raise $2.7 Billion for AI Infrastructure
Nscale, a London-based AI infrastructure startup, plans to raise $2.7 billion to build data centers around the globe that use Nvidia chips and rent them to companies training and operating AI models. The company has already raised $155 million in a Series A funding round and has facilities in Norway and Texas. Nscale's goal is to meet the growing demand for AI compute and provide a scalable solution for large-scale AI customers. The company's CEO, Joshua Payne, highlighted the increasing need for AI infrastructure and Nscale's ability to manage every layer of infrastructure in the value chain.
Fortress Invests $100 Million in Dataminr's AI Push
Dataminr, a real-time AI firm, has secured a $100 million convertible financing from funds managed by affiliates of Fortress Investment Group. The investment will be used to accelerate sales to Global 2000 corporations and government agencies, expand its international footprint, and develop new applications across additional verticals. Dataminr's founder and CEO, Ted Bailey, believes that Fortress's experience as a lifecycle investor will help the company enhance its Gen AI and Agentic AI capabilities. The company's platform employs over 50 proprietary large language and multi-modal models to fuse text, image, video, sound, and sensor data across millions of sources in real time.
Cathie Wood Bets on Palantir to Disrupt Microsoft in AI
Cathie Wood, CEO of Ark Invest, has increased her stake in Palantir Technologies, making it the fund's second-largest holding. Wood believes that Palantir has the potential to lead the enterprise AI race and disrupt Microsoft's dominance in the market. Palantir is gaining traction in defense with AI-powered initiatives and has a $640 million stake in the company. Wood questions Microsoft's ability to counter AI-driven disruption, particularly to Excel, and endorses Palantir CEO Alex Karp's vision for the company to become the largest pure-play enterprise AI software provider.
Meta Platforms Stock Down 28% from Peak
Meta Platforms' stock has dropped 28% from its peak due to concerns over the strength of the US economy. Despite this, the company's AI leadership and unparalleled access to interactions and data from over 3.35 billion daily active users give it a significant edge in training AI models. Meta's AI-powered tools are designed to enhance user engagement across its platforms, and the company is expected to report revenue growth of around 13.5% year over year in its Q1 earnings report. The stock's current valuation appears attractive, with shares trading at a forward price-to-earnings ratio of 21 times its 2025 consensus EPS estimate.
SoundHound AI's Future Prospects
SoundHound AI's stock has been volatile recently, but the company has a massive target market for its voice interpretation services. The company has been around for two decades and has raised money in a 2022 initial public offering to support its growth. SoundHound AI's revenue doubled in the fourth quarter of 2024, and the company has a $1.2 billion backlog of unfilled long-term contracts. However, the stock's valuation is not supported by profits, and the revenue-based valuation is extremely lofty at 45 times trailing sales. Investors should wait for the company's first-quarter report to get a better understanding of its prospects.
Nvidia Shares Drop Amid AI Chip Threat from Huawei
Nvidia's shares were marked lower in pre-market trading after reports that Huawei Technologies is preparing to launch its own AI chips. This could potentially threaten Nvidia's dominance in the AI chip market. The company's shares have been volatile in recent months, and investors are watching the situation closely. Nvidia is a leading player in the AI chip market, and any significant competition from Huawei could impact its stock price.
Lightrun Raises $70 Million for AI Code Correction
Lightrun, an Israeli startup, has raised $70 million in a Series B financing round to develop its AI-powered code correction technology. The company's platform allows developers to monitor and diagnose software faults in real-time, without having to shut down the system or release a new version. Lightrun's technology is designed primarily for development and infrastructure management teams in large enterprises and integrates AI to speed up the process of detecting and fixing faults. The company has seen significant growth, with a more than 4-fold increase in revenue and doubling of its employee base.
Anthropic Forms Economic Advisory Council for AI Research
Anthropic, a generative AI startup, has launched an Economic Advisory Council to guide research into AI's effects on labor markets and the global economy. The council will advise Anthropic on the design of an Economic Index to track AI's impact on employment, productivity, and growth over time. The company has raised $3.5 billion in funding and is valued at $61.5 billion. Anthropic's move follows a similar step by competitor OpenAI, which hired its first chief economist in late 2023. The council's findings could influence how investors, policymakers, and corporations navigate AI-driven shifts in employment and economic structure.
Sources
- 2 Magnificent AI Stocks Down 27% and 32% That Investors Will Wish They Bought on the Dip
- Report: Nscale Aims to Raise $2.7 Billion to Build AI Infrastructure
- Fortress Backs Dataminr’s AI Push with $100 Million Investment
- Cathie Wood: Palantir Could Disrupt Microsoft in AI Race
- Meta Platforms Stock Is Down 28% From Its Peak. Here's How the Rest of 2025 Could Play Out for This AI Stock. @themotleyfool #stocks $META
- Where Will SoundHound AI Be in 1 Year?
- Nvidia shares marked lower in pre-market trading amid AI chip threat from Huawei
- Israeli AI code correction co Lightrun raises $70m
- Anthropic Taps Experts on AI's Macro Impact