ChatGPT drives hyperscaler growth as companies invest $1 billion

Key Takeaways

• Wolfe Research views recent AI stock market shifts as a reset, not a collapse, with leadership rotating.
• Hyperscalers have grown significantly since ChatGPT's launch, while software stocks lag.
• Code Metal secured $125 million in Series B funding for AI-powered defense industry software.
• Large companies, including those with over $1 billion in revenue, are adopting a long-term, disciplined approach to AI investment.
• Foreign investors sold approximately $1.2 billion in Indian IT shares in early February due to AI impact concerns.
• SoundHound AI is pursuing an independent voice and agentic AI platform strategy for businesses.
• Ouster is recommended as a strong buy for its leadership in digital LiDAR and optical sensing for physical AI.
• Jim Cramer identifies CrowdStrike as a top buy, citing AI's strengthening effect on its cybersecurity business.
• UiPath received G2 awards for Best AI Software Products despite a recent stock decline.
• The current rotation out of technology stocks is seen as healthy, creating opportunities in oversold tech.

Wolfe Research: AI stock market shifts are a reset, not a collapse

Wolfe Research believes recent stock market changes involving artificial intelligence are a reset, not a sign of a major collapse. Analyst Stephanie Roth noted mixed signals, with software sentiment weakening but the overall market staying strong. The firm sees leadership in sectors rotating rather than failing, suggesting AI risks are being re-evaluated. They expect economic growth to rise and bond yields to increase, which will support other stocks before AI leadership returns. Hyperscalers have grown significantly since ChatGPT's launch, while software stocks lag.

Wolfe Research: AI stock market shifts are a reset, not a collapse

Wolfe Research suggests that recent turbulence in artificial intelligence stocks is a recalibration of expectations, not a fundamental economic change. Analyst Stephanie Roth observed mixed market signals, including weaker software sentiment and lower bond yields, despite a resilient stock market. The firm believes sector leadership has rotated, not collapsed, and that the repricing of AI risks might be more advanced than the current economy suggests. Long-term AI adoption is still in its early stages, with usage nearing 35% in large companies. Wolfe Research anticipates economic growth and rising bond yields, which will support cyclical stocks before AI leadership re-emerges.

Analyst: Tech stock rotation is healthy despite AI sentiment shifts

An analyst suggests that the current rotation out of technology stocks is a healthy sign for the market. This shift indicates market strength and creates opportunities in oversold tech stocks, especially with a positive economic outlook. Large tech companies are expected to increase their spending, which could boost earnings for firms like Texas Instruments and Corning. The analyst advises against completely abandoning tech stocks and recommends diversification, as overselling might lead to attractive valuation opportunities.

SoundHound AI could triple with better execution, analyst predicts

SoundHound AI is pursuing a unique strategy as an independent voice and agentic AI platform for businesses wanting data control. If adoption grows and losses decrease, long-term investors could see significant gains. The company's stock price was noted on February 5, 2026. This pullback might present a major opportunity or a potential trap for investors. SoundHound AI aims to provide enterprises with control over their data and brand through its AI solutions.

Code Metal raises $125 million for AI-powered defense industry software

Code Metal, a Boston startup using AI to write and translate code, has secured $125 million in Series B funding. The company focuses on modernizing the defense industry by using AI for code generation and translation across programming languages. Code Metal's software translates code from languages like Python and C++ to lower-level or hardware-specific languages such as Rust and CUDA. Early customers include L3Harris, RTX, and the US Air Force. The startup aims to address the challenge of modernizing old code for new applications, especially in critical sectors like defense.

Big companies shift from AI hype to long-term capital discipline

Large companies are moving away from the initial hype around artificial intelligence and adopting a more disciplined, long-term approach to capital investment. A recent survey of 60 CFOs at firms with over $1 billion in revenue shows they now view generative AI as a long-duration transformation, similar to cloud computing. Expected timelines for AI integration have doubled as companies recognize the complexity of scaling the technology. CFOs are now evaluating AI's return on investment across multiple outcomes like customer experience and margins, not just cost savings. This shift indicates AI is becoming a core part of business infrastructure rather than just a quick efficiency tool.

Ouster leads in physical AI, making it a strong buy, says analyst

An analyst recommends buying Ouster, citing its leadership in digital LiDAR and optical sensing for physical AI applications. The company targets 30-50% annual revenue growth and aims for profitability within three years by expanding gross margins through its software-attached business. The current valuation is seen as attractive, with potential for rapid improvement as profitability increases and recurring software revenue grows. Key risks include execution on software differentiation and potential shareholder dilution, but the long-term outlook is promising if growth targets are met.

Jim Cramer calls CrowdStrike 'the one to buy' due to AI strength

Jim Cramer identifies CrowdStrike as a top stock to buy, stating that artificial intelligence is making its business stronger. He believes the cybersecurity company is well-positioned to benefit from the increasing security risks associated with AI adoption. Despite a recent dip in its stock price, Cramer is confident in CrowdStrike's growth potential. He highlighted that the company's business is improving with more advanced AI capabilities. Cramer also discussed other stocks like Texas Roadhouse and Boeing during his CNBC Investing Club segment.

UiPath recognized for AI innovation despite stock decline

UiPath has received multiple honors in G2's 2026 Best Software Awards, including for Best AI Software Products and Best Global Software Companies. This recognition highlights the company's advancements in intelligent automation and AI. However, UiPath's stock has experienced a significant decline, falling 22.6% in the past 30 days and 30.1% year to date. Despite the stock's recent struggles, the industry accolades underscore strong user satisfaction with UiPath's AI and automation solutions. Investors are currently weighing the company's technological achievements against broader market trends and its financial performance.

Foreign investors sell Indian IT stocks amid AI concerns

Foreign investors have resumed selling Indian information technology stocks due to concerns about the impact of artificial intelligence. Global funds sold approximately $1.2 billion worth of Indian IT shares in early February. This follows a period where foreigners had become buyers in December. Analysts suggest that rapid AI advancements could reduce demand for traditional IT outsourcing services, leading to this sell-off. Foreign ownership in Indian IT companies has significantly decreased since the end of 2024.

Sources

• Market rotation signals reset, not reversal in AI trade, says Wolfe Research By Investing.com
• Market rotation signals reset, not reversal in AI trade, says Wolfe Research By Investing.com
• Rotation out of tech stocks is ‘quite healthy’ despite AI sentiment swings
• Prediction: SoundHound AI Could Triple if Execution Improves
• Code Metal Raises $125 Million to Rewrite the Defense Industry’s Code With AI
• Billion-Dollar Firms Swap AI Hype With Long-Term Capital Discipline, Data Shows
• Physical AI Is The Next Frontier; Buy Ouster
• Jim Cramer says this stock is 'the one to buy' because AI makes its business stronger
• UiPath Earns G2 AI Honors While Shares Trade Below Valuation Estimates
• Foreign Investors Resume Selling Indian IT Stocks on AI Scare