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AI Stocks Frenzy! Nvidia, Microsoft Soar on OpenAI Drive – Is a Bubble Brewing?
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AI Stocks Frenzy! Nvidia, Microsoft Soar on OpenAI Drive – Is a Bubble Brewing?

by
28 September 2025
  • Tech giants rally: Nvidia surged after unveiling a $100 billion OpenAI investment, and Microsoft topped Q2 forecasts while pledging a $30 billion AI buildout in the UK [1] [2]. Oracle, Broadcom, AMD and other chip/cloud leaders also climbed on booming AI demand [3].
  • Big partnerships: Alibaba jumped ~10% after announcing a new trillion-parameter AI model “Qwen3-Max” and a partnership with Nvidia to expand global AI data centers [4]. Boeing’s defense unit agreed to use Palantir’s AI platform in production lines, lifting PLTR shares about 2% on the news [5] [6].
  • Market flows & ETFs: U.S. equity funds saw roughly $12 billion of inflows (week to Sept 24) after the Nvidia/OpenAI announcement [7]. AI-focused funds and tech ETFs led gains. For example, KraneShares’ AGIX ETF (AI & Technology) was added to LPL Financial’s no-fee platform, broadening access [8]. Retail investing is also shifting: about half of surveyed investors say they would use AI tools like ChatGPT to pick stocks, and 13% already do [9].
  • Expert caution and forecasts: Analysts warn of sky-high spending with uncertain payoffs. Bain & Co. estimates roughly $500 billion/year must be invested in data centers (needing ~$2 trillion annual AI revenue by 2030), far above current returns [10]. A recent MIT study found 95% of firms have seen no ROI from AI so far [11]. Rising Treasury yields also threaten to slow the AI investment binge by making massive capex projects more expensive [12] [13].
  • Global AI race & regulation: Geopolitics loom large. The UAE is rapidly building AI infrastructure – its president met OpenAI’s Sam Altman on Sept 27 to deepen cooperation, even as the UAE plans one of the world’s largest AI data centers and an Arabic AI model [14] [15]. Meanwhile, the US-China tech tug-of-war continues (US export curbs on AI chips, China pushing a global AI governance framework) [16] [17].

The late-September surge left US indexes near record highs on renewed AI optimism. “There needs to be a catalyst for stocks to move materially higher,” notes Oliver Pursche of Wealthspire Advisors, warning that stretched valuations mean markets may be ignoring potential headwinds [18]. Dan Moczulski of eToro cautions retail investors: “The risk comes when people treat generic models like ChatGPT or Gemini as crystal balls” [19]. Even OpenAI’s CEO Sam Altman has admitted the AI industry faces “bubble fear” despite explosive revenue growth [20].

In short, AI-focused stocks and funds have drawn massive investor attention and flows, driven by big announcements and aggressive capex plans. But many experts point out that the outsized spending plans (trillions over the decade) may take years to pay off [21] [22]. For now, the market ride goes on – but analysts warn it could be volatile. Investors would do well to heed both the bullish momentum and the skeptics asking tough questions about future returns.

Sources: Latest news from Reuters, company releases and financial commentary on Sept 27–28, 2025 [23] [24] [25] [26] [27] [28] [29] [30] [31], etc.

5 Stocks I’m Buying in the AI Stock Market Crash
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References

1. finviz.com, 2. www.insidermonkey.com, 3. www.reuters.com, 4. www.reuters.com, 5. www.reuters.com, 6. www.reuters.com, 7. www.reuters.com, 8. kraneshares.com, 9. www.reuters.com, 10. www.nasdaq.com, 11. www.reuters.com, 12. www.reuters.com, 13. www.reuters.com, 14. www.reuters.com, 15. www.reuters.com, 16. www.reuters.com, 17. www.reuters.com, 18. www.reuters.com, 19. www.reuters.com, 20. www.nasdaq.com, 21. www.reuters.com, 22. www.nasdaq.com, 23. www.reuters.com, 24. www.reuters.com, 25. www.reuters.com, 26. www.reuters.com, 27. www.reuters.com, 28. www.nasdaq.com, 29. finviz.com, 30. www.reuters.com, 31. www.reuters.com

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Mateusz Kaczmarek Latest posts

A technology and finance expert writing for TS2.tech. He analyzes developments in satellites, telecommunications, and artificial intelligence, with a focus on their impact on global markets. Author of industry reports and market commentary, often cited in tech and business media. Passionate about innovation and the digital economy.

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Stock Market Today

  • Portland General Electric Faces Dilution Risks as EPS Slips Despite Modest Profit Growth
    November 8, 2025, 9:24 AM EST. Portland General Electric's latest earnings release showed modest profit improvement, but a deeper issue lurks: share dilution. The company issued about 6.7% more shares over the past year, spreading net income across a larger base and helping explain why EPS fell even as reported profits climbed. Over three years, the firm posted a 22% annualized profit gain, yet EPS declined 0.04% annually and net income slid 12% last year. EPS fell 17% in that period, signaling dilution is eroding shareholder returns. Analysts forecast future profits, but without sustained EPS growth, upside in POR could be constrained. Investors should heed three warning signs attached to POR and watch for any plan to curb share issuance or lift per-share profitability.
  • Stephens Lowers Papa John's Price Target; Overweight View Persists for PZZA
    November 8, 2025, 9:22 AM EST. Stephens cut Papa John's (PZZA) target price from $50.00 to $49.00 while keeping an overweight rating, implying a potential upside of about 14% from current levels. The note contrasts with other analysts: Deutsche Bank raised targets to $46 (hold), Mizuho to hold, Bank of America remains neutral with a $50 target (down from $62), Stifel lifted to $42 (hold), and Weiss maintains a hold. Market consensus leans Hold with a $50.50 target from MarketBeat. In trading, PZZA opened around $42.82; the stock sports a $1.40B market cap, a P/E near 19, and a 52-week range of $30.16-$59.08. In the latest quarter, earnings missed estimates ($0.32 vs $0.40) amid modest revenue of $508.15M. Institutional activity notable with Brandes boosting stake.
  • York Water (NASDAQ:YORW) ROCE Decline Sparks Turnaround Watch
    November 8, 2025, 9:20 AM EST. Investors chasing a multi-bagger should watch trends in ROCE and the capital base. York Water (NASDAQ:YORW) posts a trailing ROCE of about 4.4%, roughly in line with the water utilities average of around 4.8%. Yet the ROCE trend has fallen from ~6.0% over five years, and the company has been reinvesting more capital without a clear lift in sales. That mix suggests early or longer-term returns may be muted. The stock also shows a -23% performance over five years, signaling investor hesitation about a near-term turnaround. Overall, while reinvestment continues, the returns are shrinking and the case for a rapid multi-bagger is not strong. Investors should heed the two highlighted risks and monitor upcoming earnings for any improvement.
  • Mercury General (NYSE: MCY) Declares $0.3175 Dividend; EPS Growth Supports Low Payout Ratio
    November 8, 2025, 9:12 AM EST. Mercury General Corporation (NYSE: MCY) declared a quarterly dividend of $0.3175 per share, payable December 24. The annual yield is about 1.5% of the price, in line with the industry. The stock has a history of dividend cuts-from $2.47 in 2015 to $1.27 most recently-a decline of roughly 6.4% per year-so dividend sustainability matters. Yet EPS has grown about 13% per year over five years, supporting a relatively low payout ratio (roughly 13% next year if the EPS forecast (up ~19.4%) holds). With solid cash flow coverage and reinvestment, the idea could appeal to income investors, though one warning sign is noted.
  • Analysts Trim OmniAb Price Targets After Q3 Results; 2026 Revenue Seen Up 51%
    November 8, 2025, 9:10 AM EST. Analysts have trimmed OmniAb, Inc. (NASDAQ: OABI) price targets after its latest quarter, as the stock slid about 11% to $1.38. Revenue miss: $31.9m projected for 2026, up 51% year over year, while losses are still seen at around $0.45 per share. The consensus across seven analysts sees 2026 revenue growth reacceleration, but spirits remain dampened by the ongoing losses and a revised target price that averaged $8.00, down 5.9%. The most bullish and bearish estimates range from $11.00 to $3.00, underscoring a wide dispersion. Analysts note OmniAb's outlook would need to outperform peers and the broader industry, which is projected to grow ~5.9% annually, to justify a stronger multiple. No major changes to earnings forecasts, but sentiment remains cautious.
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