Wall Street’s sentiment toward companies associated with artificial intelligence is shifting, and it’s all about two companies: OpenAI is down, and Alphabet Inc. is up.
The maker of ChatGPT is no longer seen as being on the cutting edge of AI technology and is facing questions about its lack of profitability and the need to grow rapidly to pay for its massive spending commitments. Meanwhile, Google’s parent is emerging as a deep-pocketed competitor with tentacles in every part of the AI trade.
“OpenAI was the golden child earlier this year, and Alphabet was looked at in a very different light,” said Brett Ewing, chief market strategist at First Franklin Financial Services. “Now sentiment is much more tempered toward OpenAI.”
“A light has been shined on the complexity of the financing, the circular deals, the debt issues,” Ewing said. “I’m sure this exists around the Alphabet ecosystem to a certain degree, but it was exposed as pretty extreme for OpenAI’s deals, and appreciating that was a game-changer for sentiment.”
“There’s a growing sense that Alphabet has all the pieces to emerge as the dominant AI model builder,” said Brian Colello, technology equity senior strategist at Morningstar. “Just a couple months ago, investors would’ve given that title to OpenAI. Now there’s more uncertainty, more competition, more risk that OpenAI isn’t the slam-dunk winner.”
Representatives for OpenAI and Alphabet didn’t respond to requests for comment.
The difference between being first or second place goes beyond bragging rights, it also has significant financial ramifications for the companies and their partners. For example, if users gravitating to Gemini slows ChatGPT’s growth, it will be harder for OpenAI to pay for cloud-computing capacity from Oracle or chips from AMD.
By contrast, Alphabet’s partners in building out its AI effort are thriving. Shares of Lumentum, which makes optical components for Alphabet’s data centers, have more than tripled this year, putting them among the 30 best performers in the Russell 3000 Index. Celestica provides the hardware for Alphabet’s AI buildout, and its stock is up 252% in 2025. Meanwhile Broadcom — which is building the tensor processing unit, or TPU, chips Alphabet uses — has seen its stock price leap 68% since the end of last year.
OpenAI has announced a number of ambitious deals in recent months. The flurry of activity “rightfully brought scrutiny and concern over whether OpenAI can fund all this, whether it is biting off more than it can chew,” Colello said. “The timing of its revenue growth is uncertain, and every improvement a competitor makes adds to the risk that it can’t reach its aspirations.”
In fairness, investors greeted many of these deals with excitement, because they appeared to mint the next generation of AI winners. But with the shift in sentiment, they’re suddenly taking a wait-and-see attitude.
“When people thought it could generate revenue and become profitable, those big deal numbers seemed possible,” said Brian Kersmanc, portfolio manager at GQG Partners, which has about $160 billion in assets. “Now we’re at a point where people have stopped believing and started questioning.”
Kersmanc sees the AI euphoria as the “dot-com era on steroids,” and said his firm has gone from being heavily overweight tech to highly skeptical.
“We’re trying to avoid areas of over-hype and a lot of those were fueled by OpenAI,” he said. “Since a lot of places have been touched by this, it will be a painful unwind. It isn’t just a few tech names that need to come down, though they’re a huge part of the index. All these bets have parallel trades, like utilities, with high correlations. That’s the fear we have, not just that OpenAI spun up this narrative, but that so many things were lifted on the hype.”
Altman’s dismissal was problematic because the gap between OpenAI’s revenue and its spending plans between now and 2033 is about $207 billion, according to HSBC estimates.
“I see a lot of untapped demand and penetration across industries, and that will ultimately underpin growth,” said Kieran Osborne, chief investment officer at Mission Wealth, which has about $13 billion in assets under management. “Monetization is the end goal for these companies, and so long as they work toward that, that will underpin the investment case.”
