This Week's AI Trading Landscape

The week of December 1-9, 2025, showed major shifts in how the stock market treats AI companies. Investors are changing their minds about which AI companies will win. This is important because it shows how traders actually think AI agents and AI technology will be used in the real world.

Meta's Real AI Agent Breakthrough

The biggest news for actual AI agents this week is that Meta is building an AI agent that can create and manage advertising campaigns for small businesses. This is not just a theory or a future idea. This is happening right now. The AI agent can help small business owners run their advertisements, something that used to only big companies with special advertising teams could do well. This AI agent uses intelligence to learn what kinds of ads work best and then automatically fixes the ads to make them better. This real-world use of agentic AI is already helping Meta make more money from its advertising business. Meta's revenue grew 26% last quarter, and earnings grew 20%, showing that these AI tools are actually working.

The Great Sentiment Shift: OpenAI Down, Google Up

This week, Wall Street made a dramatic change in which AI companies investors like best. Just a few weeks ago, everyone loved companies connected to OpenAI and wanted to invest in them. But this week, those same companies are being sold off heavily. Meanwhile, companies connected to Google's parent company, Alphabet, are becoming the favorites.

Why? Experts say that Google's latest AI model called Gemini received better reviews than OpenAI's latest ChatGPT version. This made investors worried that OpenAI might not stay on top of the AI race. OpenAI is also spending huge amounts of money but isn't making enough profit yet, which scares investors.

Because of this shift, companies that sell to OpenAI are losing value. For example, AMD, Oracle, and CoreWeave have all seen their stock prices drop. But companies that work with Alphabet are doing great. Broadcom, which makes special chips for Google, has seen its stock go up 68% this year. Lumentum, which makes parts for Google's data centers, has seen its stock more than triple in 2025.

Stock Prices Getting Too Expensive?

Experts are warning that many AI stocks might be overpriced right now. Some researchers at Morningstar say that after big price increases, many AI stocks now look expensive compared to what they actually earn. However, Morningstar still thinks some stocks like Nvidia, Microsoft, and AMD have room to go higher.

A group called BCA Research is even more worried. They think there might be an "AI Winter" coming in the next one to three years. An "AI Winter" means that companies stop spending so much money on AI, and AI stock prices drop sharply. BCA thinks there is an 80% chance that AI will only help the economy grow by 0.4-0.5% per year, which sounds good but might not be enough to make the high stock prices make sense.

AI Chip Supply Remains Extremely Tight

Despite worries about prices, the special computer chips needed for AI remain very hard to find. Companies that make these chips, like Nvidia and Broadcom, are still seeing very strong demand. Morgan Stanley (a big investment bank) said this week that they are raising their price targets for both companies because supply is so tight. Companies are having trouble getting enough chips to run their AI programs, which means chip makers can raise prices and stay profitable.

What This Means for AI Agents

The real story here is that AI agents like Meta's advertising agent are finally proving that AI makes real money. While stock traders worry about high prices and possible crashes, companies are actually using AI agents to do real work. Meta's AI agent shows that agentic AI works in the real world today, not just in laboratories. This could help calm some investor worries because it shows that companies are getting real value from AI technology.