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AI Stocks Soar Amid Blockbuster Earnings, Massive Chip Deal, and Global Tech Alliances

July 28, 2025
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AI Stocks Soar Amid Blockbuster Earnings, Massive Chip Deal, and Global Tech Alliances

Key Developments in AI Stock News (July 27–28, 2025)

  • Big Tech AI Boom: Alphabet (Google) crushed Q2 forecasts with $96.4 billion revenue (up 14% YoY) as new AI features and cloud demand powered an earnings beat reuters.com. The company surprised investors by boosting 2025 capital expenditures by $10 billion to ~$85B to meet surging AI infrastructure needs reuters.com. CEO Sundar Pichai cited “strong and growing demand” for Google Cloud’s AI-driven services, which saw sales jump nearly 32% – far above expectations reuters.com. Alphabet’s upbeat results, alongside robust guidance from SK Hynix and Infosys, underscore how “AI is one of the strongest areas of growth for the economy, and the market mirrors the economy,” said 50 Park Investments CEO Adam Sarhan reuters.com.
  • Mega-Cap Stocks Near Records: U.S. tech giants extended their rally. Nvidia (NVDA) – the poster child of AI chips – traded around its all-time high (near $174 per share) with a staggering $4.2 trillion market cap marketbeat.com marketbeat.com. Microsoft (MSFT) also hovered near record levels at $513+ (market cap ~$3.8T) marketbeat.com marketbeat.com ahead of its earnings this week. Even AI-focused upstarts have surged – Palantir (PLTR) has rocketed over 100% year-to-date, hitting a fresh record around $154 per share by mid-July research.quotemedia.com on booming demand for its AI Platform. Meta (Facebook’s parent) stock has likewise rallied into its July 30 earnings, as the company pours billions into AI – CEO Mark Zuckerberg recently said Meta will invest “hundreds of billions of dollars” building AI data centers reuters.com. Investors and analysts increasingly view these hefty AI expenditures as crucial long-term bets: “The tech community is full speed ahead…Other companies will struggle to get growth” outside of AI, observes former Medtronic CEO Bill George reuters.com.
  • $16.5B Tesla–Samsung Chip Deal: In a major semiconductor partnership, Tesla CEO Elon Musk confirmed a $16.5 billion agreement to source advanced chips from Samsung Electronics reuters.com. Musk announced on X (Twitter) that “Samsung’s giant new Texas fab will be dedicated to making Tesla’s next-generation AI6 chip. The strategic importance of this is hard to overstate” reuters.com. He even pledged to “walk the line” at the Austin-area plant to accelerate progress reuters.com. The deal – running through 2033 – is a huge boost for Samsung’s contract foundry business, which has been losing ground to TSMC. Samsung’s stock jumped over 6% in Seoul on the news reuters.com, as analysts say it could slash billions in losses at Samsung’s foundry unit reuters.com. “This will help reduce [Samsung’s] foundry losses,” noted Kiwoom Securities analyst Pak Yuak, after estimates that division lost over 5 trillion won (~$3.6B) in H1 reuters.com. The partnership also positions Samsung to fight back in the AI chip race – currently, it holds just ~8% of the global foundry market vs. TSMC’s 67% reuters.com, and has seen key clients like Apple and Nvidia favor TSMC reuters.com. Notably, Tesla’s current Full Self-Driving computer runs on Samsung-made chips, and its future A15 and A16 AI chips are slated for late 2026 and beyond reuters.com, pointing to a long-term collaboration.
  • Trade Truce & Chip Tariff Twist: Geopolitics remain a wildcard for AI markets. Over the weekend, U.S. Commerce Secretary Howard Lutnick revealed the administration will announce results of a national security probe into semiconductor imports within two weeks reuters.com. This probe (under Section 232) could pave the way for new tariffs on foreign chips, a prospect that spurred the EU to strike a trade deal with the U.S. on July 27. President Trump agreed to pause implementing harsh tech export controls on China for now – an olive branch to keep trade talks on track reuters.com reuters.com. According to an FT report confirmed by Reuters, the Commerce Department was instructed “to avoid tough moves on China” in recent months while Trump seeks a summit with Xi Jinping reuters.com. In fact, top U.S. and Chinese officials resumed talks in Stockholm on Monday. As part of this thaw, Nvidia said it is seeking licenses to resume sales of its H20 AI GPUs to China – chips previously banned in April – and has been assured approvals will come soon reuters.com reuters.com. Rival AMD likewise expects to restart shipments of its MI308 accelerators to China reuters.com. The news that Washington may allow some high-end AI chips back into China has fueled a buying frenzy by Chinese tech firms for Nvidia’s H20 chips reuters.com. It also sparked political backlash: “This move…endangers the United States’ economic and military edge in AI,” a group of security experts warned in an open letter urging stricter controls reuters.com. Still, markets cheered the de-escalation – Nvidia’s stock climbed 4% on the China sales hopes reuters.com, and global equities broadly rose after the U.S.–EU tariff truce. Europe’s Stoxx 600 hit four-month highs on July 28 on relief that a worst-case trade war was averted, and Asia’s tech-heavy indexes also strengthened reuters.com reuters.com.
  • China’s AI Offensive at WAIC: China’s tech giants showcased a flurry of new AI products and alliances at the World Artificial Intelligence Conference (WAIC) in Shanghai (July 26–28), underscoring China’s drive to build a self-reliant AI ecosystem. In a direct response to U.S. chip export curbs, leading Chinese AI firms announced two major industry alliances aimed at reducing dependence on foreign tech reuters.com reuters.com. The “Model-Chip Ecosystem Innovation Alliance,” unveiled at WAIC, links together domestic large-language model developers with Chinese chipmakers like Huawei, Biren, Moore Threads, and Enflame reuters.com – all companies hit by U.S. Nvidia chip restrictions. “This is an innovative ecosystem that connects the complete technology chain from chips to models to infrastructure,” explained Enflame CEO Zhao Lidong of the new coalition reuters.com. A second alliance, under Shanghai’s Chamber of Commerce, brings together firms such as SenseTime (which pivoted from facial recognition to AI models after U.S. sanctions) along with startups StepFun and MiniMax and chip designers like Metax, to “promote deep integration of AI technology and industrial transformation.” reuters.com These collaborations underscore China Inc.’s determination to forge ahead despite U.S. export barriers.
  • Next-Gen AI Products Rivaling U.S.: WAIC also featured a slew of cutting-edge Chinese AI systems that signal rising competition for U.S. firms. Huawei grabbed headlines by debuting its CloudMatrix 384 AI computing cluster – packing 384 of its latest 910C AI chips – which “outperforms Nvidia’s GB200 NVL72 on some metrics,” according to semiconductor research firm SemiAnalysis reuters.com reuters.com. Industry analysts say Huawei’s new system, first revealed in April, effectively rivals Nvidia’s most advanced AI computing platform reuters.com. Dylan Patel of SemiAnalysis even wrote that Huawei now has AI system capabilities that could beat Nvidia reuters.com. Multiple Chinese hardware firms at WAIC exhibited similar high-density “AI supernode” designs – for example, Metax showed off a 128-chip liquid-cooled AI server node reuters.com. In software, Tencent open-sourced its Hunyuan3D World Model 1.0, enabling users to generate interactive 3D environments from text or image prompts reuters.com. Baidu unveiled a next-generation “digital human” avatar technology that helps businesses auto-generate virtual presenters – using “cloning technology” to mimic a person’s voice, tone and body language from just 10 minutes of video footage reuters.com. Even consumer gadgets got an AI twist: Alibaba announced Quark AI Glasses (due in China late 2025) powered by its Qwen AI model, allowing wearers to navigate maps or pay via Alipay using voice commands and QR code scanning in a heads-up display reuters.com. These innovations illustrate how Chinese companies are racing to close the gap in AI hardware and software, backed by government support and a massive domestic market – a point not lost on investors watching global AI leaders.

Market Outlook: AI Front and Center

With AI the “future of technology” driving corporate fortunes reuters.com, markets worldwide remain laser-focused on the sector. Global investors are bracing for an “action-packed week” ahead reuters.com: U.S. mega-caps Apple, Microsoft, and Amazon report earnings in coming days, where any commentary on AI initiatives and spending will be closely parsed. In Asia, Samsung is set to report earnings on Thursday amid its renewed AI chip push reuters.com. Wall Street’s enthusiasm for all things AI has pushed the S&P 500 and Nasdaq to fresh highs, and despite valuation concerns – many AI stocks trade at hefty multiples – the momentum continues. “It highlights that companies are shifting their spending in the direction of AI, and it’s pretty much the future,” said Dakota Wealth portfolio manager Robert Pavlik as Nvidia’s valuation hit historic levels reuters.com.

However, analysts caution that sustaining these lofty expectations will require real execution. The AI boom’s parallels to the late-1990s dot-com bubble are debated: today’s tech titans are far larger and more profitable than the startups of 1999, yet valuations are stretched and “a meaningful, prolonged market correction cannot be ruled out, especially if AI-driven growth isn’t delivered as quickly as investors expect,” one Reuters columnist noted reuters.com. For now, though, the AI tide is lifting (almost) all boats – from chipmakers to cloud providers – and “markets [are] bolstered by strong tech results” reuters.com. As generative AI and machine learning continue to transform industries, the stock market is betting big that this is only the beginning of a new tech revolution. Investors will be watching closely for the next catalyst – be it an earnings call soundbite, a breakthrough product, or a policy decision – that could send AI-related stocks into their next act. The race for AI leadership is a global one, and it’s accelerating by the day.

Sources:

How To Invest In AI Stocks | Business Insider Explains | Business Insider
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Mateusz Brzeziński

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