Intel Shares Sold as AMD and Nvidia Investments Grow

The AI sector continues to attract significant investment and reshape market dynamics, with major tech companies and investors making strategic moves. Billionaire investor David Tepper's Appaloosa Management recently sold its Intel shares, instead acquiring a new position in Advanced Micro Devices (AMD) and substantially increasing its stake in Nvidia. Tepper's firm believes these AI infrastructure stocks offer superior growth prospects amid the ongoing AI buildout, highlighting AMD's strong demand for its MI300 series GPUs. This shift underscores a broader industry focus on high-growth AI hardware and cloud solutions. Tech giants are pouring billions into expanding their AI capabilities. Amazon announced a $50 billion investment to boost its AI offerings for government clients starting in 2026, part of a larger $125 billion AI spending plan by the end of 2025. Amazon Web Services (AWS) plans to add 1.3 gigawatts of AI and data center capacity and broaden access to tools like SageMaker, aiming to compete with platforms such as Palantir's. Meanwhile, Meta Platforms is heavily investing in AI data centers to meet future demand, reporting robust third-quarter fiscal 2025 revenue of $51.2 billion, a 26% year-over-year increase, and an 18% rise in operating income to $20.5 billion. Meta aims to leverage AI to enhance user engagement and ad conversion rates across its apps, which serve over 3.5 billion daily users. The competition in AI cloud and chip markets is intensifying. Alibaba Group Holding is emerging as a strong contender in the AI cloud space, with its Cloud Intelligence Group seeing revenue grow 34% to $5.59 billion in the September quarter, driven by public cloud expansion and rapid AI product adoption. Alibaba, the fourth-largest cloud provider globally, also rolled out upgraded full-stack AI capabilities in September. In the chip arena, Alphabet's Google is posing a significant challenge to Nvidia's market lead. Google, which developed its Tensor Processor Units (TPUs) in 2013, now offers them to cloud customers, with Meta Platforms reportedly considering purchasing Tensor AI processors. The stock market now views Google as leading the AI race, especially after the release of its Gemini 3 AI model and 7th generation Tensor Processing Unit Ironwood in November, causing stocks linked to Google's AI to trade at a premium. Dedicated AI infrastructure providers are also making waves. Nebius Group, an AI-optimized data center provider, has secured major deals, including a multiyear GPU capacity supply agreement worth $17.4 billion with Microsoft, potentially expanding to $19.4 billion, and a five-year AI infrastructure deal with Meta Platforms valued at $3 billion. Nebius plans to increase its capital expenditure from $2 billion to $5 billion in 2025 to expand power capacity by late 2026. On the financial front, BlackRock Investment Institute is bearish on long-term U.S. Treasuries, forecasting that a large wave of AI-related financing could increase U.S. borrowing costs and government debt, potentially pushing the U.S. 10-year Treasury yield to between 4.25% and 4.75% over the next 6-12 months. Despite some market wobbles, experts remain optimistic for 2026, expecting heavy AI investments to boost future earnings growth, with AI adoption potentially generating nearly $130 billion for the S&P 500.

Key Takeaways

• David Tepper's Appaloosa Management sold Intel shares and increased stakes in AMD and Nvidia, signaling a focus on AI infrastructure growth.
• Amazon commits $50 billion to expand AI capabilities for government clients by 2026, part of a $125 billion total AI investment by end of 2025, adding 1.3 gigawatts of data center capacity.
• Meta Platforms invests heavily in AI data centers, reporting Q3 FY25 revenue of $51.2 billion (up 26%) and operating income of $20.5 billion (up 18%).
• Alibaba Group Holding's Cloud Intelligence Group revenue grew 34% to $5.59 billion in the September quarter, driven by public cloud and AI product adoption.
• Alphabet's Google challenges Nvidia's chip dominance with its Tensor Processor Units (TPUs), with Meta Platforms reportedly considering their purchase; Google's Gemini 3 and 7th gen Ironwood TPUs lead market perception.
• Nebius Group secured a $17.4 billion multiyear GPU capacity deal with Microsoft and a $3 billion five-year AI infrastructure deal with Meta Platforms, planning to increase 2025 CapEx to $5 billion.
• BlackRock Investment Institute is bearish on long-term U.S. Treasuries, predicting AI financing will increase U.S. borrowing costs and government debt, with the 10-year Treasury yield possibly reaching 4.25%-4.75%.
• AI stock fluctuations are not a major concern for 2026, as heavy AI investments are expected to boost future earnings, potentially adding $130 billion to the S&P 500.
• Overlooked AI stocks like Airship AI Holdings (projecting 30% revenue growth and a $135 million pipeline), TSS Inc. (Q3 YTD revenues of $184.8 million), and Veritone Inc. (Q3 software revenue of $29.1 million) show growth potential.
• South Korean AI startup Upstage plans an IPO in Korea by H2 2026 or H1 2027, having already raised about $70 million in funding.

David Tepper Sells Intel and Oracle Buys AI Stocks

Billionaire investor David Tepper's Appaloosa Management sold its shares in Intel and Oracle during the third quarter. Tepper instead bought a new position in Advanced Micro Devices AMD and significantly increased his stake in Nvidia. He believes these AI infrastructure stocks offer better growth prospects in the ongoing AI buildout. AMD is a major GPU supplier alongside Nvidia and sees strong demand for its MI300 series. This move highlights Tepper's focus on high-growth opportunities in the AI market.

Amazon Boosts AI Investment for Government Clients

Amazon announced a $50 billion investment to expand its AI capabilities for government clients starting in 2026. This builds on its plan to spend $125 billion on AI by the end of 2025, as stated in its third-quarter earnings call. Amazon Web Services AWS is the leading cloud provider and serves Top Secret, Secret, and GovCloud segments. The company will add 1.3 gigawatts of AI and data center capacity and widen access to tools like SageMaker. This move aims to compete with platforms like Palantir's and further Amazon's lead in the AI race.

Meta Platforms Invests Heavily in AI for Future Growth

Meta Platforms is investing a lot in building AI data centers to prepare for future demand. In the third quarter of fiscal 2025, Meta's revenue grew 26% year over year to $51.2 billion, and operating income rose 18% to $20.5 billion. The company aims to use AI to improve user engagement and ad conversion rates across its apps, which are used by over 3.5 billion people daily. Despite high spending, Meta's strong financials and future AI monetization potential make it a smart pick for long-term investors with high risk tolerance.

Alibaba Emerges as a Strong AI Cloud Stock

Alibaba Group Holding is highlighted as a potential "sleeper" AI cloud stock for 2026. It is the fourth-largest cloud computing provider globally and holds a dominant position in the Chinese market. Alibaba's Cloud Intelligence Group saw its revenue increase by 34% to $5.59 billion in the September quarter, driven by public cloud growth and rapid AI product adoption. The company also rolled out upgraded full-stack AI capabilities in September. Alibaba offers a better valuation and higher expected revenue growth than some larger competitors like Amazon and Alphabet.

Nebius Group Outperforms Nvidia in AI Infrastructure

Nebius Group, an AI-optimized data center provider, has shown higher stock returns than Nvidia in the past year. Nebius rents out AI-optimized data center capacity and has secured major deals. It signed a multiyear GPU capacity supply deal worth $17.4 billion with Microsoft, which can expand to $19.4 billion. Nebius also has a five-year AI infrastructure deal with Meta Platforms worth $3 billion. The company plans to increase its capital expenditure from $2 billion to $5 billion in 2025 to add significant power capacity by the end of 2026.

BlackRock Sees Risk in Long-Term US Treasuries Due to AI Funding

The BlackRock Investment Institute is now bearish on long-term U.S. Treasuries for the next six to twelve months. They warn that a large wave of AI-related financing could increase U.S. borrowing costs. This also adds to worries about the U.S. government's high debt, which is currently over $38 trillion. BlackRock believes higher borrowing across public and private sectors will keep upward pressure on interest rates. While AI could boost government revenue eventually, this process will take time.

BlackRock Forecasts Higher Rates and Debt Due to AI Funding

The BlackRock Investment Institute is now bearish on long-term U.S. Treasuries, expecting them to underperform. They predict that AI-related financing will increase U.S. borrowing costs and government debt. The BII forecasts the U.S. 10-year Treasury yield to trade between 4.25% and 4.75% over the next 6-12 months, up from its previous forecast. They also expect the U.S. economy to grow by 2.5% and inflation to remain elevated at 3.0% by year-end. The Federal Reserve may cut interest rates by 75 basis points this year, and the U.S. debt-to-GDP ratio could rise to 120% by 2026.

Three Overlooked AI Stocks Show Growth Potential for 2026

Three AI infrastructure and software companies, Airship AI Holdings, TSS Inc., and Veritone Inc., are highlighted as overlooked stocks for 2026. Airship AI provides AI software and hardware for government clients, predicting 30% revenue growth and a $135 million new business pipeline. TSS Inc. offers data center integration services, nearly doubling its year-to-date revenues to $184.8 million in Q3. Veritone Inc. serves over 3,000 clients with its aiWare platform and saw software revenue reach $29.1 million in Q3. These companies offer unique ways to invest in the continued expansion of AI.

Three Strong Sectors Beyond AI for Investors

Mark Hackett, Nationwide's chief market strategist, points out three strong sectors performing well outside of the AI trade. The energy sector is up 10% year-to-date and trades at a low 10 multiple, benefiting from geopolitical risks and supply constraints. Financials are up 8% year-to-date and trade at a 12 multiple, supported by rising interest rates and a strong economy. Industrials are up 7% year-to-date and trade at a 15 multiple, boosted by infrastructure and defense spending. Investors should diversify their portfolios and focus on quality companies with strong balance sheets, cash flow, and earnings.

South Korean AI Startup Upstage Plans IPO

South Korean AI startup Upstage has hired KB Securities Co. and Mirae Asset Securities Co. to help with its initial public offering. The Seoul-based company aims to go public in Korea as early as the second half of 2026, or by the first half of 2027 at the latest. Upstage was co-founded in 2020 by Sung Kim, who previously led an AI development team at Kakao Corp. The firm has already raised about $70 million in funding from investors including SoftBank Group Corp. and Class 5 Global.

AI Stock Fluctuations Are Not a Major Concern

Despite recent market wobbles for AI stocks, experts remain optimistic for 2026. Dennis DeBusschere of 22V Research notes a split between "GOOG Complex" stocks like Alphabet and "OpenAI complex" stocks like Nvidia. He suggests that while some AI companies have more debt, this divergence is natural and not a major economic problem. Heavy AI investments are expected to boost future earnings growth, even if they create short-term headwinds. HSBC strategist Alastair Pinder believes AI adoption could generate nearly $130 billion for the S&P 500 and increase earnings before interest and taxes EBIT margins by 50 basis points.

Alphabet's AI Chips Challenge Nvidia's Market Lead

Alphabet's Google is emerging as a significant threat to Nvidia's dominance in the AI data center chip market. Google, which began developing its Tensor Processor Units TPUs in 2013 for internal use, now offers them to cloud computing customers. Recent reports suggest Meta Platforms is considering buying Tensor AI processors for its data centers. Alphabet has deep financial resources, earning over $100 billion in net profit last year, and its Google Cloud is one of the biggest service providers. This move by Alphabet signals growing competition for Nvidia from other tech giants.

AI Analyst Recommends Three Top ETFs for Investment

An AI analyst from TipRanks recommends three Exchange Traded Funds ETFs with an Outperform rating and at least 10% upside. The Monarch Blue Chips Core ETF MBCC, which invests in large, established companies, has a $41 price target, suggesting 12.39% growth potential. The BlackRock Large Cap Growth ETF BGRO, launched last June, also has a $41 price target, suggesting over 10% upside, and includes holdings like Nvidia and Broadcom. The Gotham Enhanced 500 ETF GSPY, which uses special valuation models for S&P 500 stocks, also has a price target of $41, suggesting approximately 10% upside.

Stock Market Sees Google Leading AI Race Against OpenAI Nvidia

The stock market now views Google as leading the AI race over OpenAI and Nvidia. This shift follows the release of Google's Gemini 3 AI model and its 7th generation Tensor Processing Unit Ironwood in November. Wells Fargo strategist Ohsung Kwon notes that stocks linked to Google's Gemini and TPUs now trade at a premium compared to those tied to OpenAI's ChatGPT and Nvidia GPUs. OpenAI CEO Sam Altman has even declared a "code red" to improve ChatGPT's quality. Alphabet's stock has rallied over 66% this year, and its chip partner Broadcom also saw a large increase.

Sources

• Billionaire David Tepper Dumped Intel and Oracle in the Past Quarter, and Piled Into These AI Infrastructure Stocks
• Amazon Just Made a Major AI Announcement. Here's What It Means for Investors.
• Is Meta Stock a Buy After Its AI Spending Spree?
• Why This AI Cloud Stock Could Be the Market's Biggest Sleeper
• The AI Stock That's Secretly Crushing Nvidia
• BlackRock turns bearish on long-term Treasuries as AI funding wave looms
• BlackRock turns bearish on long-term Treasuries as AI funding wave looms
• 3 Overlooked AI Stocks to Watch in 2026 - TSS (NASDAQ:TSSI), Airship AI Holdings (NASDAQ:AISP)
• 3 winning sectors outside of the AI trade
• AI Startup Upstage Hires KB Securities, Mirae for Korea IPO
• Why AI stocks’ wobbles aren’t a reason to worry
• This Is the Biggest Threat to Nvidia's Artificial Intelligence (AI) Dominance That Virtually No One Is Talking About
• 3 Best ETFs to Invest In, According to AI Analyst, 12/02/2025
• The stock market believes Google is now winning the AI race over OpenAI, Nvidia