Updated: 26.12.2025 | 10:14 a.m. ET
Wall Street’s AI trade is finishing 2025 with a familiar mix of momentum and scrutiny: megacap tech remains a key engine for index gains, but investors are increasingly demanding proof that massive AI spending will translate into sustainable margins and earnings growth.
In thin post‑Christmas trading on Friday, U.S. stocks held near all‑time highs, with the S&P 500 touching an intraday record and edging closer to the 7,000 milestone—while Nvidia grabbed the spotlight after a licensing deal tied to one of the most important shifts in AI computing: the rise of inference. Reuters
Market snapshot: AI stocks stabilize as “Santa Claus rally” season begins
In early trading Friday, the major indexes were modestly higher and near record territory, extending a late‑December rebound that followed bouts of volatility earlier in the month. Reuters reported that at 9:39 a.m. ET, the Dow was up about 0.02%, the S&P 500 up about 0.14%, and the Nasdaq up about 0.17%, with the S&P 500 hitting an intraday record and moving toward 7,000. Reuters
That market tone matters for AI stocks because 2025’s rally has been driven heavily by mega‑cap technology—yet investors have been rotating in and out of the “AI winners” depending on how confident they feel about the return on AI capital expenditures. Reuters noted that stocks have climbed in recent days after “months of intermittent selloff” tied to worries over AI valuations and the profitability impact of AI spending. Reuters
Seasonality is also in focus. Reuters highlighted that the “Santa Claus rally” window—traditionally the last five trading days of the year plus the first two in January—began on Wednesday and runs through January 5. Reuters
The headline move: Nvidia ties up Groq’s inference tech and top talent
The biggest AI‑stock catalyst dominating today’s tape is Nvidia’s agreement tied to Groq, a startup known for chips optimized for AI inference—the “serving” phase where trained models respond to user requests in real time.
Reuters reported that Nvidia agreed to a non‑exclusive license for Groq’s inference technology and is bringing over Groq’s founder Jonathan Ross, President Sunny Madra, and other engineering team members. The report also noted CNBC’s claim of a roughly $20 billion value attached to the transaction, while emphasizing that financial terms were not disclosed and that neither company confirmed CNBC’s figure. Reuters
Groq’s own newsroom post framed the deal as a non‑exclusive licensing agreement with Nvidia “to accelerate AI inference at global scale,” and confirmed the leadership transition: Ross, Madra, and other team members are moving to Nvidia; Groq said it will continue operating independently under CEO Simon Edwards, and its GroqCloud business will continue. Groq
This is a crucial distinction for investors: it looks like an “acqui‑hire plus IP license” structure rather than a traditional acquisition—an approach that has become more common as Big Tech pursues talent and capabilities while navigating regulatory sensitivity. Reuters explicitly pointed to this broader pattern and cited other high‑value “licensing” style deals across major tech companies. Reuters
Why inference is the new battleground for AI chip stocks
For much of the generative‑AI boom, the market’s obsession was training—the expensive, GPU‑hungry process of building frontier models. But the next leg of growth is increasingly about inference: delivering those models in products, at low latency and reasonable cost, across consumer apps and enterprise workflows.
Reuters underscored this competitive dynamic: Nvidia dominates training, but faces “much more competition in inference,” including from AMD and specialist startups like Groq and Cerebras. Reuters
One technical angle investors are latching onto is memory. Reuters noted that Groq is among the upstarts that avoid external high‑bandwidth memory dependence, using on‑chip SRAM approaches that can speed interactions for chatbots and other AI models—while also limiting the size of model that can be served. Reuters
The deal also brings a policy overlay. Reuters quoted Bernstein analyst Stacy Rasgon warning that antitrust is a major risk area, while suggesting the non‑exclusive structure may help preserve an appearance of competition even as key talent migrates to Nvidia. Reuters
Investor takeaway: this isn’t just “another AI headline.” It’s a signal that the market’s attention is shifting to unit economics (cost per inference), deployment scale, and competitive moats in the serving layer—where hyperscalers and custom silicon are pressing harder.
AI stocks today: mid‑morning scoreboard
Below are mid‑morning reference levels captured shortly after 10:30 a.m. ET (latest prints available at the time of data pull). Movements are from the prior close:
- Nvidia (NVDA): $191.88 (+3.27, +1.7%)
- AMD (AMD): $216.44 (+1.41, +0.7%)
- Broadcom (AVGO): $352.28 (+2.06, +0.6%)
- Palantir (PLTR): $191.55 (-2.62, -1.3%)
- Oracle (ORCL): $197.80 (+0.31, +0.2%)
- Microsoft (MSFT): $486.99 (-1.03, -0.2%)
- Alphabet (GOOGL): $312.79 (-1.30, -0.4%)
- Amazon (AMZN): $232.10 (-0.28, -0.1%)
- Meta (META): $664.07 (-3.48, -0.5%)
- TSMC (TSM): $301.27 (+2.48, +0.8%)
- ASML (ASML): $1,069.58 (+4.06, +0.4%)
Meanwhile, Reuters reported that within the S&P 500 sector map earlier today, information technology led gainers while utilities and industrials lagged—consistent with a market still willing to lean into growth narratives when rates and earnings expectations cooperate. Reuters
Forecasts and forward view: the AI trade faces a “prove‑it year” in 2026
Even as the S&P 500 flirts with 7,000, the market’s optimism has a time limit: companies now have to show their work.
Reuters quoted Annex Wealth Management’s Brian Jacobsen saying 2026 is likely a “prove‑it” year in which companies must deliver “tangible productivity and margin gains” from AI and other investments. Reuters also cited LSEG‑compiled expectations that S&P 500 profits could rise 15.5% in 2026, versus 13.2% forecast growth for 2025. Reuters
Looking a week ahead, Reuters’ “Week Ahead” piece highlighted several near‑term macro catalysts that can quickly reprice high‑multiple AI names:
- Fed minutes next week may clarify how policymakers debated the outlook. Reuters
- The Fed has cut 75 basis points over its last three meetings of 2025, leaving the benchmark rate at 3.50%–3.75%—and markets remain highly sensitive to how many additional cuts could arrive in 2026. Reuters
- Rotation is an ongoing theme: Reuters noted tech had struggled at points in recent weeks while other areas (financials, transports, healthcare, small caps) strengthened—suggesting investors are more valuation‑selective than they were earlier in the AI boom. Reuters
Bottom line: if rates trend down and earnings expectations hold, AI leaders can keep leading. If “AI capex” headlines start sounding less profitable, the market has shown it can de‑risk quickly.
The overlooked AI catalyst: power and data center capacity
One of the most important 2025 lessons for AI investors is that the bottleneck is no longer “just GPUs.” It’s also electricity, land, grid interconnects, and data center buildouts.
Earlier this week, Alphabet announced it would acquire Intersect in a $4.75 billion deal (cash plus assumed debt) to expand energy and infrastructure capability tied to data centers and AI needs—an example of Big Tech buying into the power stack to support AI expansion. Reuters
For AI stocks broadly, this reinforces a forward thesis: AI winners are increasingly tied to infrastructure execution—not just model quality. When an AI company can secure energy and capacity faster, it can deploy products faster, capture workloads sooner, and potentially protect margins.
China and regulation: the next swing factor for AI chip demand
Another recurring driver for AI chip stocks is the on‑again, off‑again flow of U.S. export licensing and China policy.
Reuters previously reported that Nvidia was aiming to begin shipments of its H200 chips to China ahead of Lunar New Year in mid‑February, contingent on U.S. approvals, using existing stock. Reuters
On the policy front, Reuters also reported U.S. lawmakers pushing for more disclosure around AI chip license reviews tied to China—an issue that can create sharp sentiment shifts for chipmakers and the supply chain. Reuters
AMD is part of the same equation. Reuters reported earlier this month that AMD CEO Lisa Su said the company has licenses to ship some MI 308 chips to China and was prepared to pay a 15% tax to the U.S. government if it ships them. Reuters
For investors, these aren’t side stories—they’re potential demand accelerants or brakes, depending on how approvals, tariffs, and geopolitical negotiations evolve.
What to watch next for AI stocks
If you’re tracking AI stocks into the final trading days of 2025 and the start of 2026, the market is rewarding investors who follow the next set of fundamentals, not just the “AI narrative.”
Key watch items:
- Inference economics: any sign that serving costs are falling (or rising) for hyperscalers and enterprise deployments.
- AI margin signals: AI revenue growth is great; AI revenue growth at shrinking margins can quickly change the multiple.
- Capex discipline: who is still accelerating spend, and who is turning spend into cash flow.
- Power and capacity deals: energy procurement, new data center buildouts, and infrastructure acquisitions.
- China policy headlines: licensing approvals, tariff actions, and compliance frameworks that affect shipments and customer demand.
Note: This article is for informational purposes only and is not investment advice. Stock prices are volatile, and past performance does not guarantee future results.
