Shift in Sentiment: OpenAI’s AI Dominance Challenged by Alphabet
Wall Street’s perception of companies associated with artificial intelligence (AI) is undergoing a significant shift, with OpenAI’s reputation taking a hit and Alphabet Inc. emerging as a strong competitor. The maker of ChatGPT, once considered the leader in AI technology, is now facing questions about its lack of profitability and massive spending commitments. Meanwhile, Google’s parent company, Alphabet, is gaining traction with its deep pockets and diverse range of AI-related businesses.
According to Brett Ewing, chief market strategist at First Franklin Financial Services, “OpenAI was the golden child earlier this year, and Alphabet was looked at in a very different light. Now sentiment is much more tempered toward OpenAI.” As a result, companies associated with OpenAI, such as Oracle Corp., CoreWeave Inc., and Advanced Micro Devices Inc., are experiencing heavy selling pressure. In contrast, Alphabet’s momentum is boosting the stock prices of its associated companies, including Broadcom Inc., Lumentum Holdings Inc., Celestica Inc., and TTM Technologies Inc.
Alphabet’s AI Ecosystem Gains Traction
Alphabet’s perceived strength in AI extends beyond its Gemini model, with a host of adjacent businesses, including Google Cloud and a semiconductor manufacturing operation. The company’s significant market capitalization and cash reserves also give it a competitive edge. As Brian Colello, technology equity senior strategist at Morningstar, notes, “There’s a growing sense that Alphabet has all the pieces to emerge as the dominant AI model builder.” This shift in sentiment has significant financial implications for companies associated with OpenAI, which may struggle to pay for cloud-computing capacity and chips if users gravitate towards Gemini.
The difference in sentiment towards OpenAI and Alphabet is reflected in their stock prices. A basket of companies connected to OpenAI has gained 74% in 2025, while Alphabet-exposed stocks have jumped 146%. The technology-heavy Nasdaq 100 Index has risen 22% over the same period. The skepticism surrounding OpenAI can be dated to August, when it unveiled GPT-5 to mixed reactions, and has intensified since Alphabet released its Gemini model to rave reviews.
OpenAI’s Challenges and Controversies
OpenAI’s public relation flaps, including a suggestion by its chief financial officer, Sarah Friar, that the US government “backstop the guarantee that allows the financing to happen,” have raised eyebrows. The company’s CEO, Sam Altman, has also faced criticism for his response to questions about OpenAI’s spending commitments, which exceed its revenue by $207 billion, according to HSBC estimates. As analyst Nicolas Cote-Colisson notes, “Closing the gap would need one or a combination of factors, including higher revenue than in our central case forecasts, better cost management, incremental capital injections, or debt issuance.”
Despite these challenges, companies associated with OpenAI, such as Oracle and AMD, are not solely reliant on the startup and operate in areas with ongoing demand. Their products could find customers even without OpenAI, and the weakness in their stocks may represent a buying opportunity. As Kieran Osborne, chief investment officer at Mission Wealth, notes, “I see a lot of untapped demand and penetration across industries, and that will ultimately underpin growth.” However, the shift in sentiment towards OpenAI and Alphabet serves as a reminder of the risks and uncertainties associated with investing in AI-related companies.
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