AI Stocks: Tech Giants, Cloud Titans Face 'Show Me' Moment. CoreWeave IPO On Tap.

Is the artificial intelligence stock market boom still wired or tired amid the emergence of China's DeepSeek? Top AI stocks such as Microsoft (MSFT) and Nvidia (NVDA) face high expectations. For many companies — such as Google parent Alphabet (GOOGL), Amazon.com (AMZN) and Facebook parent Meta Platforms (META) — the rise of generative AI poses both risk and opportunity.

Amid the rise of generative AI — which generates text, images, and video — it's a good time to be cautious amid the hype, especially given recent developments at Super Micro Computer (SMCI).

Many companies suddenly tout AI product roadmaps. In general, look for AI stocks that use artificial intelligence to improve products or gain a strategic edge.

Meanwhile, Nvidia-backed CoreWeave has reportedly set pricing for its initial public offering. CoreWeave will price shares in a range of $47 to $55. The CoreWeave IPO is expected to raise around $2.5 billion, down from earlier estimates of $4 billion. CoreWeave is a new AI cloud services provider.

Nvidia Updates AI Roadmap

Chip maker Nvidia hosted its GTC Conference in mid-March. Nvidia stock is now down 12% in 2025.

For Nvidia, margin pressure as it ramps up production of next-generation Blackwell AI chips in 2025 has been a key issue. At GTC, Nvidia also updated its AI accelerator roadmap. "Nvidia's ability to drive generational leaps in performance while executing a product-cycle cadence at a one-year rhythm compounds its competitive edge," said Bank of America analyst Vivel Arya in a report.

In 2023 and 2024, semiconductor plays out-performed software companies as the best AI stocks. Investor interest in data center infrastructure stocks has cooled off in 2025. Nvidia and many other AI stocks are in the red.

What's clear is that AI stocks are under more scrutiny.

"We expect AI to transition from a 'tell me' to a 'show me' story, with any disconnect between investments and revenue generation to come under increased scrutiny," said a Bank of America report.

Software Stocks To Emerge As Best AI Stocks?

One view is that software companies will emerge as the best AI stocks if they can monetize new products and services.

At Bank of America, analyst Brad Sill says software IPOs may not be likely near-term.

"Software to cleanse, manage and secure data coupled with enablers of AI models for training and applications (inference) appear to be drawing the most investor interest," he said in a report. "AI-native startups with significantly lower headcount than traditional software companies offering pure AI solutions are likely looking 2-3 years away for IPO exits."

What's more, data analytics software maker Palantir (PLTR) recently hosted its sixth AI event. PLTR stock has climbed nearly 16% in 2025 after soaring 340% last year.

Palantir — as well as Snowflake and privately held Databricks — are focused on helping companies use proprietary data to build their own AI models. Here's a look at Databrick's strategy.

In an IBD interview, ServiceNow (NOW) Chief executive Bill McDermott explained about how the enterprise software maker aims to be an AI winner. ServiceNow stock has dipped 22% this year.

At an investor day, Adobe (ADBE) disclosed it had a modest $125 million in AI standalone annual recurring revenue as of the end of Q1 2025.

Meanwhile, software maker Salesforce (CRM) reported Q4 earnings 26 that disappointed. The software maker's fiscal 2026 outlook came in light even though it's ramping up new AI products. CRM stock has shed 16% in 2025.

Snowflake (SNOW) Q4 earnings topped expectations. SNOW stock has gained 2% in 2025.

DeepSeek Shakes Up AI Trade

Further, China startup DeepSeek has roiled AI stocks, including Nvidia.

DeepSeek came out of nowhere to release a powerful AI training model developed with much less computing power. AI stocks sold off amid new questions over the outlook for capital spending on artificial intelligence infrastructure.

Here's IBD's take on the key questions involving DeepSeek, including U.S./China competition in artificial intelligence.

Despite the emergence of DeepSeek, cloud computing titans and tech giants plan big increases in artificial-related capital spending in 2025 amid the race to human-like artificial general intelligence (AGI).

The AI assistant battleground now includes OpenAI's ChatGPT, xAI's Grok, DeepSeek, Anthropic's Claude, Google's Gemini, Perplexity and Meta.

The commoditization of AI models could spur application development. While "training" AI models has been the biggest driver of capital spending, the market will shift to "inferencing," or running AI applications, in the long run.

Having struggled to generate new revenue from "copilots," software companies are now turning to autonomous, goal-driven AI agents. One big issue for software companies is how fast customers ramp up pilot programs to commercial deployment.

AI Stocks: Meta Sets Llama Conference

Meanwhile, Meta stock has advanced 2.5% in 2025. Further, Meta will host its first developer conference, called LlamaCon, on April 29. The event will showcase Meta's open-source AI model ecosystem and its Llama series of models. A new Llama model is expected to debut.

At the event, Meta could release its own AI-driven search engine, posing a new worry for Google.

Further, Meta AI now has over 700 million monthly average users , and management believes it is now the No. 1 leading AI assistant. Meta expects to reach 1 billion users in 2025. With AI, the social media giant plans to deliver more personalized and relevant responses for users across apps, including Thread.

Meta last year hired away Salesforce's top AI executive, Clara Shih, to head a new "Business AI" group.

Also, Morgan Stanley projects that Meta's generative AI-related revenue will grow at a 67% compound annual growth rate to $101 billion in 2028, up from $13 billion last year.