The S&P 500 recently hit a record high of 6,920.88 on December 24, 2025, fueled by strong performance in tech and AI stocks. However, not all AI companies are seeing gains. The Trade Desk and DataDog, two prominent AI stocks, have experienced significant price drops. The Trade Desk's stock fell by 73% from its recent highs, while DataDog saw a 30% decline. These movements reflect a mixed picture for the AI sector, with some companies facing headwinds despite overall market optimism.The Trade Desk, with a market cap of $18 billion, faced challenges in 2025 including lower revenue growth and a Q4 earnings miss, alongside a transition to its AI-powered Kokai platform. Competition from Amazon in connected-TV advertising also poses a threat, though CEO Jeff Greene emphasizes the company's focus on the open internet. DataDog, valued at $48 billion, saw its stock drop despite strong third-quarter earnings. This decline was attributed to insider selling and increased competition from Palo Alto Networks, which acquired Chronosphere. Despite these setbacks, DataDog reported 28% revenue growth and now serves over 500 native AI customers with its AI observability tools. Both companies are leaders in their respective growing markets and show potential for a strong rebound in 2026.In major AI news, Nvidia made a strategic move involving AI chip startup Groq. Initially, a Reuters report on December 24, 2025, indicated Nvidia agreed to acquire Groq for $20 billion in cash, a deal that would have been its largest since Mellanox. However, on December 25, 2025, it was clarified that Nvidia instead entered a non-exclusive technology license agreement with Groq. Nvidia also hired Groq's founder Jonathan Ross, president Sunny Madra, and other engineers, allowing Groq to continue operating independently with a new CEO. This approach enables Nvidia to gain key talent and technology focused on high-performance AI inference chips while potentially mitigating antitrust concerns.Beyond these major players, the AI market shows diverse activity. Taiwan Semiconductor, a key AI chipmaker, and AppLovin, an advertising software company leveraging AI, both joined IBD's best stock lists on Christmas Eve, signaling strong performance in their niches. In funding news, US-based Lucid Capital, founded in 2022, closed a $2.5 million seed funding round on December 25, 2025, and secured $200 million in investor commitments. This capital will fuel its AI research and expand its AI-driven algorithmic trading strategies in US equities and digital assets.Other AI-driven companies are also making headlines. Navan, a travel technology firm, leverages AI for business travel management, reporting 29% year-over-year revenue growth and improving gross margins through AI automation. Asana, a work management platform, saw its stock drop 5.6% after executives, including COO Anne Raimondi, sold shares totaling about $2.3 million, as the company shifts its strategy to focus more on AI. Looking ahead, Microsoft's Azure cloud computing business is expected to drive strong AI-fueled growth in 2026, according to analyst Daniel Ives of Wedbush Securities, who believes Wall Street is underestimating its potential despite some skepticism regarding Microsoft's significant AI investments.
Key Takeaways
- The Trade Desk's stock dropped 73% to an $18 billion market cap due to 2025 revenue growth challenges, a Q4 earnings miss, and competition from Amazon in connected-TV advertising.
- DataDog's stock fell 30% to a $48 billion market cap despite strong Q3 earnings, impacted by insider selling and increased competition from Palo Alto Networks.
- DataDog reported 28% revenue growth and serves over 500 native AI customers, with both DataDog and The Trade Desk showing potential for strong growth in 2026.
- Nvidia initially was reported to acquire AI chip startup Groq for $20 billion, but instead entered a non-exclusive technology license agreement and hired Groq's founder and key engineers.
- Nvidia's deal with Groq focuses on gaining talent and technology for high-performance AI inference chips, allowing Groq to continue operating independently.
- Taiwan Semiconductor and AppLovin joined IBD's best stock lists, highlighting strong performance in AI chipmaking and AI-involved advertising software.
- Lucid Capital closed a $2.5 million seed funding round and secured $200 million in commitments to expand its AI-driven algorithmic trading strategies.
- Navan, an AI-driven travel technology company, reported 29% year-over-year revenue growth and improving gross margins due to AI automation.
- Asana's stock dropped 5.6% following executive share sales, as the company shifts its strategy to focus more on AI.
- Microsoft's Azure cloud computing business is projected by analysts to drive strong AI-fueled growth in 2026, despite some market skepticism regarding its AI investments.
Two AI Stocks The Trade Desk and DataDog See Price Drops
The Trade Desk and DataDog, two AI stocks, have seen their prices fall by 73% and 30% respectively. The Trade Desk faced challenges like lower revenue growth in 2025 and competition from Amazon in connected-TV advertising. Its CEO, Jeff Greene, believes their focus on the open internet gives them an advantage. DataDog's stock dropped due to insider selling and increased competition from Palo Alto Networks' acquisition of Chronosphere. However, DataDog reported strong third-quarter earnings with 28% revenue growth and over 500 AI customers, suggesting a potential turnaround in 2026.
The Trade Desk and DataDog AI Stocks Face Challenges
Two AI stocks, The Trade Desk and DataDog, have experienced significant price drops of 73% and 30% respectively. The Trade Desk struggled in 2025 with lower revenue growth and a transition to its AI-powered Kokai platform. Amazon's entry into connected-TV advertising also poses a threat, though CEO Jeff Greene highlights The Trade Desk's focus on the open internet and Unified ID 2.0. DataDog's stock fell after strong third-quarter earnings due to insider selling and competition from Palo Alto Networks. Despite these issues, both companies are leaders in growing markets and could see strong growth in 2026.
AI Stocks The Trade Desk and DataDog See Major Price Declines
The Trade Desk and DataDog, two leading AI stocks, have seen their prices drop significantly by 73% and 30% respectively. The Trade Desk, with a market cap of $18 billion, faced internal issues like a Q4 2025 earnings miss and slower revenue growth, along with competition from Amazon. DataDog, with a market cap of $48 billion, experienced a stock collapse after its third-quarter earnings due to insider selling and increased competition from Palo Alto Networks. Despite these setbacks, both companies are leaders in their fast-growing markets and show potential for strong growth in 2026. DataDog also has over 500 native AI customers.
The Trade Desk and DataDog AI Stocks Fall But Show 2026 Potential
Two AI stocks, The Trade Desk and DataDog, have dropped by 73% and 30% respectively from their recent highs in 2025. The Trade Desk faced a rough start to the year with missed earnings and slower revenue growth, also battling Amazon's entry into connected-TV advertising. DataDog's stock fell despite strong third-quarter earnings, due to insider selling and competition from Palo Alto Networks. However, DataDog's revenue increased by 28% and its customer base grew by 15% year over year. Both companies are leaders in growing AI markets and could see a turnaround in 2026.
AI Stocks The Trade Desk and DataDog See Big Drops
The Trade Desk and DataDog, two AI stocks, have seen their prices fall by 73% and 30% respectively. The Trade Desk experienced challenges in 2025, including lower revenue growth and competition from Amazon in connected-TV advertising. CEO Jeff Greene believes The Trade Desk's focus on the open internet gives it an advantage. DataDog's stock dropped after its third-quarter earnings due to insider selling and increased competition from Palo Alto Networks. Despite these issues, DataDog reported 28% revenue growth and has over 500 native AI customers using its AI observability tools, launched in April. Both companies are leaders in their fields and could rebound in 2026.
The Trade Desk and DataDog AI Stocks Down But Show Promise
Two AI stocks, The Trade Desk and DataDog, have experienced significant price drops of 73% and 30% respectively. The Trade Desk faced internal challenges in 2025, including missed earnings and slower revenue growth, as well as competition from Amazon. DataDog's stock fell after its strong third-quarter earnings due to insider selling and increased competition from Palo Alto Networks. However, DataDog reported 28% revenue growth and improving profitability, with over 500 native AI customers using its tools. Both companies are leaders in fast-growing AI markets and could offer good opportunities for long-term investors.
Nvidia Reportedly Buys AI Chip Startup Groq for $20 Billion
On December 24, 2025, the S&P 500 reached a new record high of 6,920.88, driven by tech and AI stocks. The biggest AI news of the day was a Reuters report that Nvidia agreed to buy AI chip startup Groq for $20 billion in cash. This deal, if true, would be Nvidia's largest acquisition since Mellanox and would exclude Groq's GroqCloud business. Groq, founded by Jonathan Ross, focuses on high-performance AI inference chips. This acquisition highlights the growing importance of inference in AI and the expected strong M&A activity in the AI sector for 2026.
Nvidia Licenses Groq Technology and Hires Key AI Talent
On December 25, 2025, with US markets closed for Christmas, news focused on Nvidia's deal with AI chip startup Groq. Instead of a full acquisition, Nvidia entered a non-exclusive technology license agreement and hired Groq's founder Jonathan Ross, president Sunny Madra, and other engineers. Groq will continue to operate independently with a new CEO. This strategy allows Nvidia to gain talent and technology focused on AI inference while potentially reducing antitrust concerns. Regulators are closely watching such talent-and-tech arrangements, and Nvidia's China business also remains an important factor for investors.
Taiwan Semiconductor and AppLovin Join IBD Best Stock Lists
On Christmas Eve, AI and medical stocks were popular in the market. Taiwan Semiconductor, a major AI chipmaker, joined the IBD 50 list. AppLovin, an advertising software company also involved in AI, was added to IBD's best stock lists. These additions highlight the strong performance of AI-related companies in the current market.
Lucid Capital Raises $2.5 Million to Grow AI Trading Platform
On December 25, 2025, US-based Lucid Capital, founded in 2022, closed a $2.5 million seed funding round. Tharawat Holding and Singular Link led the round, which will help Lucid Capital improve its trading infrastructure and advance AI research. The company also secured $200 million in commitments from investors to expand its AI-driven algorithmic trading strategies in US equities and digital asset markets. Lucid Capital uses autonomous AI agents and adaptive algorithms to adjust to market changes and optimize trades.
Navan Stock Shows Promise with AI Driven Travel Platform
Navan, a travel technology company, uses AI and data to improve business travel management. The company has seen strong revenue growth of 29% year over year, and its gross margins are getting better as AI automates more tasks. Despite trading below its initial public offering price and being unprofitable, Navan has recently gained major customers. It operates in a large market and is well-positioned to benefit from advancements in AI, making it a potentially compelling investment.
Asana Stock Falls 5.6 Percent After Executive Share Sales
Asana's stock (ASAN) dropped by 5.6% recently after senior executives increased their share sales. For example, Chief Operating Officer Anne Raimondi sold about $2.3 million in stock between December 18 and 22, partly to cover taxes. These sales come as Asana shifts its strategy to focus more on AI. Investors are now paying closer attention to how leadership's stock decisions align with the company's long-term plans, especially given existing concerns about volatility and financial health.
Two AI Stocks See Big Declines But May Rebound by 2026
Two leading AI stocks have experienced significant price drops, with one down 30% and another down 73% from recent highs. The first company, a leader in AI-powered data analytics, was affected by market sentiment and slower business spending. The second, a pioneer in AI-driven robotics, faced supply chain problems and more competition. Despite these challenges, both companies have strong core technologies and are making key investments. Analysts believe these stocks could see a major turnaround by 2026 as the AI market continues to grow.
Microsoft Azure Cloud Expected to Drive Strong AI Growth in 2026
Microsoft's stock saw a slight rise on Wednesday as analyst Daniel Ives from Wedbush Securities shared a positive outlook. Ives believes Wall Street is underestimating the growth potential of Microsoft's Azure cloud computing business in 2026. He reiterated his "outperform" rating, suggesting that Microsoft will prove doubters wrong with its AI-fueled growth. This comes as the software giant faces some skepticism regarding its large investments in artificial intelligence.
Sources
- 2 Extraordinary Artificial Intelligence (AI) Stocks Down 30% and 73% to Buy Before They Turn Around in 2026
- 2 Extraordinary Artificial Intelligence (AI) Stocks Down 30% and 73% to Buy Before They Turn Around in 2026
- 2 Extraordinary Artificial Intelligence (AI) Stocks Down 30% and 73% to Buy Before They Turn Around in 2026
- 2 Extraordinary Artificial Intelligence (AI) Stocks Down 30% and 73% to Buy Before They Turn Around in 2026
- 2 Extraordinary Artificial Intelligence (AI) Stocks Down 30% and 73% to Buy Before They Turn Around in 2026
- 2 Extraordinary Artificial Intelligence (AI) Stocks Down 30% and 73% to Buy Before They Turn Around in 2026
- AI Stocks Today (Dec. 24, 2025, 5:02 p.m. ET): Nvidia’s Reported $20B Groq Deal, Snowflake M&A Talk, and Wall Street’s 2026 AI Outlook
- AI Stocks Today (Dec. 25, 2025): Nvidia’s Groq Deal, Big Tech AI Spending Forecasts, and the Catalysts Investors Are Watching
- AI Chip King Taiwan Semiconductor Leads Quartet Of New Names Onto IBD Best Stock Lists
- Lucid Capital Closes $2.5M Seed Round to Expand AI Trading Platform
- Navan Stock: A Misunderstood AI Beneficiary (NASDAQ:NAVN)
- Asana (ASAN) Is Down 5.6% After Executives Step Up Share Sales Amid AI-Focused Strategy Shift
- 2 extraordinary artificial intelligence (AI) stocks down 30% and 73% to buy before they turn around in 2026
- Microsoft Will 'Prove Doubters Wrong' In 2026 With AI-Fueled Growth
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