The stock market’s AI darlings went on a tear to kick off the week, with major tech and chipmakers surging amid a flurry of bullish news. From record-shattering earnings to blockbuster funding deals and even government tailwinds, the past 48 hours have delivered a cascade of headlines turbocharging AI-related stocks. Here’s a full roundup of the key developments from August 4–5, 2025.
Tech Stocks Rebound as AI Leads a Market Rally (Aug 4)
Wall Street roared back to life on Monday after a brief sell-off, and AI-linked companies led the charge. The tech-heavy Nasdaq Composite jumped about 2% on August 4, outpacing a 1.5% rise in the S&P 500, as investors piled back into high-growth tech names investopedia.com investopedia.com. This rebound snapped a four-day losing streak for the market, which had tumbled late last week on worries about tariffs and economic health investopedia.com. Now, optimism is returning – helped by signs the Federal Reserve might cut interest rates sooner than expected, after a surprisingly weak jobs report pointed to a cooling economy investopedia.com. Lower rates would ease pressure on growth stocks, providing a welcome boost to riskier sectors like tech and AI.
Mega-cap technology firms enjoyed broad gains. Alphabet (Google) and Meta Platforms each climbed roughly 3% on Monday investopedia.com, reflecting continued enthusiasm for their AI-driven growth. Microsoft added about 2% investopedia.com as investors bet its heavy investments in generative AI (such as new Copilot features in Office) will pay off. Even Tesla, which touts AI for self-driving, rose 2%. In fact, almost every Big Tech player rallied – with one notable exception: Amazon. Amazon’s stock slipped ~1% investopedia.com, extending Friday’s post-earnings drop after the company’s cloud revenue guidance disappointed some traders. Overall, though, the vibe in tech was upbeat. All of Apple, Amazon, Meta, and Microsoft had topped Wall Street’s earnings forecasts the week prior investopedia.com, underscoring how AI and cloud demand are bolstering the giants’ results despite a mixed economic backdrop.
Smaller AI-focused names joined the rally as well. For instance, enterprise AI software maker C3.ai saw its shares gain about 3.4% on Monday stockinvest.us, bouncing off recent lows. The company has been recovering from leadership turmoil – founder CEO Tom Siebel announced plans to step down due to health issues in late July – and investors are speculating that fresh leadership could reinvigorate C3.ai’s growth. Across the board, from mega-caps to niche players, “AI” was the magic word lifting stock prices to start the week.
Nvidia and AMD – Chipmakers Surge on AI Hype and Earnings Momentum
Leading the semiconductor charge were the AI chip juggernauts Nvidia and Advanced Micro Devices (AMD). Nvidia’s stock leapt nearly 4% on Aug. 4 investopedia.com, making it one of the top gainers in the S&P 500. This jump to around $180 per share marked a sharp reversal from last week’s dip and reaffirmed Nvidia’s status as the “poster child” of the AI boom. The rally was fueled by both market momentum and intriguing news: reports surfaced that Nvidia and Alphabet’s venture arm (CapitalG) are in talks to invest in startup Vast Data at a staggering $30 billion valuation reuters.com. Vast Data builds advanced data-center storage for AI systems, and Nvidia’s rumored involvement signals its ambition to evolve from a pure chip supplier into a broader “full-stack” AI infrastructure leader fingerlakes1.com. Investors cheered the potential deal as a strategic move that could extend Nvidia’s dominance in the AI computing ecosystem. “There is one company in the world that is the foundation for the AI revolution and that is Nvidia,” lauded Wedbush analyst Dan Ives, who notes Nvidia’s GPUs remain in insatiable demand investing.com.
AMD, meanwhile, rallied ~3% on Monday ahead of its own earnings announcement slated for Aug. 5 investopedia.com. The chipmaker’s results are hotly anticipated, as Wall Street expects AMD’s data center business to show a 20%+ jump in sales amid the scramble for AI-capable processors investopedia.com. Analysts forecast quarterly revenue around $7.4 billion (up 27% year-on-year) thanks to “strong data center sales” investopedia.com, even though profits may dip due to heavy R&D spending and export curbs. Notably, AMD’s management has telegraphed that U.S. export restrictions on high-end chips to China could soon ease – the company indicated it plans to resume shipments of its MI300-series AI accelerators to Chinese customers once government approvals come through investopedia.com. That prospect prompted multiple analysts to raise their price targets on AMD in recent weeks investopedia.com investopedia.com. The stock has already surged over 40% in 2025 year-to-date investopedia.com, and optimism is running high that CEO Lisa Su will detail new AI chip wins to challenge Nvidia’s lead. In short, the AI chip race is accelerating – and investors are rewarding those seen in the pole position.
The bullishness extended across the semiconductor sector at large. The VanEck Semiconductor ETF (SMH) jumped over 2% on Aug. 4, as chipmakers from Broadcom (+3%) to Intel (+2%) climbed in sympathy investopedia.com. It’s a clear sign that Wall Street sees the AI wave driving a massive upgrade cycle in hardware – one that could lift all boats, though Nvidia and AMD are grabbing most of the spotlight (and market share) for now.
Palantir’s Blowout Earnings: First $1B Quarter and Upbeat Outlook Ignite AI Euphoria
One of the biggest headlines Monday evening came from Palantir Technologies, the data analytics firm often touted as an “AI darling” of the stock market. Palantir smashed expectations with its second-quarter earnings report, confirming that demand for its new Artificial Intelligence Platform (AIP) is skyrocketing. Revenue jumped 48% year-over-year to reach a record $1.0 billion for Q2 investopedia.com investopedia.com – marking Palantir’s first-ever billion-dollar quarter – while adjusted profit of $0.16 per share handily beat estimates investopedia.com investopedia.com. CEO Alex Karp proclaimed it a “phenomenal quarter” showcasing “the astonishing impact of AI leverage” on Palantir’s business investopedia.com. He noted that the company’s commercial revenue nearly doubled from a year ago thanks to AIP, and its U.S. government sales surged 68% as agencies embraced Palantir’s AI-driven solutions investopedia.com.
Crucially, Palantir didn’t just post strong results – it also raised its forward guidance dramatically. The company now forecasts full-year 2025 revenue of $4.14–4.15 billion, up from about $3.9B previously, and well above analysts’ consensus investopedia.com. For the current Q3, Palantir expects $1.08–1.09B in sales investopedia.com, signaling sequential growth. This rosy outlook implies Palantir sees AI-related demand staying red-hot in both its government and enterprise segments. In fact, just days ago the U.S. Army indicated it may purchase up to $10 billion of Palantir’s services over the next decade reuters.com – a testament to Palantir’s pivotal role in defense and intelligence AI applications.
All of this sent Palantir’s stock soaring even higher. The share price jumped 4% during Monday’s session ahead of earnings, then spiked another ~4% in after-hours trading once the results hit the tape investopedia.com investopedia.com. Palantir has now more than doubled its value in 2025 (and is up over 500% year-on-year!) as investors bet it can monetize the AI revolution in a way few software companies have investopedia.com. Still, there are debates about the stock’s rich valuation – Palantir’s market cap, after this run-up, implies very high expectations. Analysts remain split: only 2 out of 12 Wall Street analysts rate Palantir a “Buy” at current levels (most are Hold or Sell) investopedia.com. But bulls like Wedbush’s Dan Ives insist the Street is missing the big picture. “We believe the Street is underestimating the $1 billion+ revenue stream that [Palantir’s AIP] U.S. commercial business can evolve into over the next few years and the technology competitive moat that Karp & Co. have built,” Ives wrote, arguing Palantir’s AI prowess could make it a trillion-dollar stock in the long run investopedia.com. For now, Palantir’s blowout quarter has given AI believers plenty to celebrate.
OpenAI Hype Peaks: 700M Users and a $300B Valuation – Is the AI Bubble Still Growing?
The frenzy around OpenAI – the private company behind ChatGPT – reached new heights this week, underlining how AI mania extends beyond public markets. OpenAI reportedly just raised a whopping $8.3 billion in fresh capital at an eye-popping $300 billion valuation techcrunch.com, according to a New York Times scoop confirmed on Aug. 4. This funding round (part of OpenAI’s plan to secure $40B total this year) was oversubscribed and closed ahead of schedule as investors clamored for a piece of the AI leader techcrunch.com techcrunch.com. The roster of backers reads like a who’s-who of big money – Dragoneer Investment Group led the round with $2.8B, and others from Andreessen Horowitz to Sequoia, T. Rowe Price, Tiger Global, Blackstone, Thrive and more piled in techcrunch.com. Even SoftBank’s name has been linked to the effort. At a $300B valuation, OpenAI is now more valuable on paper than Coca-Cola (which is ~$295B) ainvest.com – an astonishing mark for a company that only began selling ChatGPT subscriptions a year and a half ago.
What’s driving this valuation skyward is OpenAI’s explosive growth. The company’s ChatGPT AI assistant is on track to hit 700 million weekly active users imminently, a user base that has quadrupled in just one year techcrunch.com ainvest.com. For context, 700 million weekly users means roughly 1 in 10 people on Earth are now utilizing an OpenAI service regularly. OpenAI’s revenue has skyrocketed in tandem – by some estimates the firm’s current run-rate is $12–13 billion annually, up from virtually nothing two years ago techcrunch.com. Internal projections see revenue reaching $20B by year-end if growth continues techcrunch.com. Enterprises are a big part of that story: the company now boasts 5 million paying business customers for ChatGPT (up 66% month-on-month) as of early August, which is driving an annualized $13B in revenue just from enterprise usage ainvest.com ainvest.com. In fact, OpenAI reportedly contributes 70% of the total revenue generated by the top 22 AI start-ups combined ainvest.com – a sign of its market dominance.
Yet OpenAI is far from profitable, given the immense costs of running AI at scale. The company is burning cash at an estimated $8+ billion per year to train models and serve users, with massive cloud infrastructure expenses (server and GPU leasing could hit $14B in 2025 alone) ainvest.com ainvest.com. This explains why OpenAI is raising such colossal sums – it needs the war chest to sustain growth until monetization catches up. The latest $8.3B injection buys more runway and cements OpenAI’s status as the most richly valued AI lab in the world. The CEO, Sam Altman, has been teasing the next big milestone: GPT-5. Altman hinted on social media and podcasts that “we are releasing GPT-5 soon,” even letting the unreleased model answer a question he couldn’t understand theverge.com. Rumors suggest GPT-5 could debut as early as this month (August), potentially boasting new capabilities like real-time web browsing and advanced multimodal output ainvest.com. If and when that happens, it could spur another wave of AI excitement – and further usage (or competition, as rivals like Anthropic’s Claude and Google’s Gemini aren’t sitting idle ainvest.com).
For public markets, OpenAI’s saga is relevant because of who wins and loses in its ecosystem. Microsoft, for one, has a deep partnership and investment in OpenAI, integrating GPT models into Azure Cloud and products – so Microsoft stands to benefit from OpenAI’s growth (and has its own hefty valuation riding on AI success). Nvidia and other chipmakers gain from the arms race to build ever-larger AI models – OpenAI’s hunger for GPUs is essentially insatiable, translating into multi-billion-dollar orders for Nvidia’s hardware. And the sheer investor appetite to fund OpenAI at $300B suggests the AI bubble still has room to inflate. As one market commentator noted, we are living through a “once-in-a-generation” paradigm shift: “the golden age of tech is here with the AI revolution”, proclaimed Wedbush’s Dan Ives, who believes Wall Street still underestimates how big this could get investing.com investing.com. Whether that proves prescient or premature, it’s clear that in early August 2025, AI optimism is at a fever pitch.
Macro and Policy Tailwinds: Rate Cuts Hopes, Tariff Turbulence, and Government AI Support
Broader economic and political currents have also been buffeting AI stocks in recent days. On the macroeconomic front, the bond market’s reaction to a sluggish U.S. jobs report has been positive for tech: traders are now betting the Fed could start cutting interest rates by next month, with perhaps three rate reductions by year-end on the table investopedia.com investopedia.com. Indeed, the 10-year Treasury yield has dipped to around 4.19%, the lowest in three months investopedia.com, reflecting those expectations. This shift is a tailwind for high-growth sectors – many AI companies trade on future earnings potential, so lower discount rates make those prospects more valuable today. In short, the market’s “bad news is good news” dynamic (weak employment boosts hopes for easy money) has been good news for AI stock bulls this week.
Geopolitics, however, remain a wild card. Late last week, President Donald Trump surprised markets by signing an executive order imposing higher tariffs on dozens of U.S. trade partners investopedia.com. This revived fears of a trade war and contributed to Friday’s stock sell-off, as investors recalled how U.S.–China tensions and export controls have previously hurt tech supply chains. Tariffs can raise costs for hardware components and complicate global sales for tech giants. However, the impact of this latest tariff move is still being digested. There are signs the administration might take a softer line on critical tech trade going forward – especially with China. “We believe the Trump Administration will continue to soften its stance around tariffs,” opined Wedbush’s Dan Ives, who actually praised reports that Nvidia has resumed sales of a tweaked “H20” AI chip to China as “a key strategic positive for the tech space” investing.com. The U.S. government appears to be balancing national security concerns with the desire to not hamstring American chipmakers. Likewise, as noted earlier, AMD is optimistic it will get permission to ship its high-end MI300 chips to Chinese cloud providers again investopedia.com. Any relaxation of export curbs or de-escalation of the trade war rhetoric could remove a major overhang on AI hardware companies.
At the same time, government spending on AI is ramping up, which bolsters the entire sector. Washington’s stance on AI under the current administration is unabashedly pro-growth: the White House recently unveiled an “AI Action Plan” that prioritizes building AI infrastructure and cutting regulatory red tape to speed up innovation techcrunch.com techcrunch.com. This marked a sharp turn from the prior administration’s cautious approach, essentially declaring that to win the “AI race” against China, the U.S. will throw its weight behind tech development (even if that means accepting some risks). The plan calls for billions in investment to “Build, Baby, Build!” data centers and to train AI talent, while downplaying discussions of AI’s potential harms techcrunch.com techcrunch.com. Such a policy environment is unquestionably favorable for AI businesses. “The direction is clear: Progress is king,” President Trump said in a statement accompanying the AI plan, underscoring that the government sees AI as key to “a new golden age” of economic growth techcrunch.com techcrunch.com. Indeed, Palantir’s latest contracts and the Pentagon’s shifting procurement to new AI vendors reuters.com reuters.com show federal dollars flowing into the sector.
Bottom line: over the past two days, AI-related stocks have ridden a perfect storm of positive factors – from strong earnings and upbeat forecasts, to huge private investment deals, to supportive macro and policy signals. The result has been a broad surge in valuations for companies at the heart of the AI revolution. As always, risks remain (any tech rally can be volatile, and lofty valuations eventually demand real results), but for now the bulls are firmly in control. As one analyst put it, “AI is a once-in-a-generation Fourth Industrial Revolution” – and if the events of August 4–5 are any indication, that revolution is accelerating investing.com.
Sources: Key information and quotes were drawn from latest market reports and earnings releases, including Investopedia’s Aug. 4 market news investopedia.com investopedia.com, Reuters and Yahoo Finance updates on Palantir’s earnings investopedia.com investopedia.com and Nvidia’s ventures reuters.com, TechCrunch and NYT reports on OpenAI’s funding techcrunch.com techcrunch.com and user growth techcrunch.com, as well as expert commentary from analysts like Dan Ives of Wedbush investing.com investing.com. This roundup captures the most significant AI stock market news and analysis from August 4–5, 2025, with links to original sources for further reading.
