The Zacks Analyst Blog Highlights NVIDIA, Microsoft, Alphabet, Meta Platforms and Alibaba

For Immediate ReleaseChicago, IL – January 30, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: NVIDIA NVDA, Microsoft MSFT, Alphabet GOOGL, Meta Platforms META and Alibaba BABA.Here are highlights from Wednesday’s Analyst Blog:AI Model Race Heats Up: BABA, NVDA, MSFT, META, GOOGL in FocusChinese Artificial Intelligence (AI) firm DeepSeek rattled the AI industry with the announcement of its low-cost AI models, prompting a huge sell-off in shares of U.S. tech giants, including NVIDIA, Broadcom, Amphenol, AMD, Microsoft, Alphabet and Oracle.Microsoft through its OpenAI investment and GOOGL via Gemini models are direct competitors of DeepSeek along with Meta Platforms Llama models. DeepSeek is now facing competition in the domestic front with Alibaba, China's leading ecommerce giant, releasing its latest Qwen 2.5 model.BABA's Model Surpasses DeepSeek, META, OpenAIAlibaba claims that its Qwen 2.5 model outperforms DeepSeek-V3, OpenAI's GPT 4o and META's Llama-3.1-405B models. Alibaba has been facing the brunt of DeepSeek's low-cost AI models as it was compelled to lower prices of its models post the launch of DeepSeek V2, predecessor of V3.Apart from Alibaba, Baidu (Ernie 4.0), TikTok parent ByteDance (Doubao 1.5 Pro) and Moonshot AI are primary competitors of DeepSeek in the Chinese AI market.DeepSeek's models are gaining attention due to efficient performance at low costs and energy use. Its latest open-source model that was released last week, DeepSeek-R1-Zero and DeepSeek-R1, showed similar performance to that of OpenAI's reasoning models and META's Llama models on leading benchmarks such as the AIME 2024.However, OpenAI is reportedly alleging that DeepSeek R1 was trained on its model, which violates its intellectual property rights.Spending on AI to Remain RobustDeepSeek's low-cost open-source models are definitely raising questions about the spending trend of U.S. tech giants, which are expected to spend billions on model development and AI infrastructure.DeepSeek V3 apparently costs $5.6 million as it was trained and developed on NVIDIA's low-capacity H800 chips. DeepSeek uses less than 2,050 GPUs, while Meta Platforms reportedly uses 16000 chips of NVIDIA H100s to train its Llama 3 405B model.OpenAI is estimated to have spent close to $3 billion on training models and data in 2024, per data from DeepLearning.ai. According to Reuters, U.S. tech giants are estimated to spend roughly $250 billion on AI infrastructure, with META alone planning to spend between $60 billion and $65 billion in capital expenditures on AI in 2025.Moreover, OpenAI, SoftBank and Oracle, along with the Trump administration, announced the Stargate joint venture, which intends to invest $500 billion over the next four years building new AI infrastructure.China has also created an AI investment fund worth 60 billion yuan (roughly $8.2 billion) to boost innovation. The country has invested significantly on developing the semiconductor industry to make advanced computer chips.Which Among the U.S. Tech Giants is Best to Invest Upon?DeepSeek's sudden rise has put U.S. technology giants — Microsoft, Meta Platforms and Alphabet — under considerable pressure. These three companies have been leveraging AI, Generative AI (GenAI) and machine learning to boost potency of their offerings. They are also poised to spend most on developing AI infrastructure.Microsoft has benefited most from the rapid deployment of GenAI thanks to its collaboration with OpenAI. This Zacks Rank #3 (Hold) company is benefiting from its strategic focus on cloud services, particularly Azure and the Office 365 suite.Effective usage of AI has been aiding Meta Platforms to keep its users engaged. AI-driven feed recommendations have been a key catalyst for this Zacks Rank #3 stock.Alphabet is leveraging AI to attract new clients, win larger deals and deepen product adoption among existing customers. Its Gemini AI models are currently used by more than 2 billion users monthly across products and platforms. GOOGL also has a Zacks Rank #3.NVIDIA, despite losing a chunk of its value on DeepSeek's disruptive wave, is expected to benefit most due to its alluring portfolio. The semiconductor giant has been benefiting from the accelerating usage of its GPUs, including Hopper and Ampere architectures. In fact, we believe the dip in NVDA's share price offers a buying opportunity for growth-oriented investors.NVIDIA currently has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.com                                      https://www.zacks.com                                                   Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis Report Alibaba Group Holding Limited (BABA): Free Stock Analysis Report Meta Platforms, Inc. 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