"Associated with OpenAI, it loses appeal!" Wall Street begins to "liquidate" OpenAI concept stocks; Google surges 36% to become the winner.

Wall Street's attitude toward OpenAI is undergoing a dramatic reversal. Stocks related to partnerships with OpenAI, once favored by the markets, are now being sold off, with the share prices of Microsoft, Oracle, and other companies plummeting, while Alphabet, Google's parent company and a competitor of OpenAI, has become the biggest winner due to the strong financial returns from its AI business, with its stock surging about 36% since last October.

The shift in market logic is vividly reflected in the words of Wall Street analysts. Paul Meeks, Head of Technology Research at Freedom Capital Markets, said:

"The market is forming a narrative that prefers Google over OpenAI. This time last year, every time OpenAI announced a partnership with a company, it was applauded. But by the end of 2025, people are starting to say, 'Oh my, too much of my revenue backlog or AI infrastructure spending comes from OpenAI.'"

This change in sentiment is evident in stock prices. Oracle's share price has plunged about 49% since last October, with its backlog of over $500 billion in contracts largely dependent on OpenAI. Microsoft, which owns 27% of OpenAI and sees it as a key client, has seen its stock drop more than 20% in the same period. Meanwhile, Alphabet's share price has risen about 36% over the same period.

According to a previous Wall Street article, a report from Deutsche Bank revealed a harsh reality: the frenzy of AI investment has entered a "major shakeout" phase, with the prosperity of the S&P 500 index possibly propped up mainly by Google. This fierce reshuffling among tech stocks is redefining winners and losers in the AI era.

Market Narrative Reversal: From Enthusiasm to Questioning OpenAI Dependency

Investor concerns about OpenAI stem from its financial sustainability. Despite signing numerous multibillion-dollar deals, the company continues to operate at a loss, raising market doubts about its ability to fulfill its commitments and dragging down tech giants closely tied to it.

Dan Morgan, Portfolio Manager at Synovus Trust, pointed out:

"OpenAI's deals with Microsoft and Oracle are highly dependent on its future funding capability. I think that's why the market prefers Alphabet."

This shift is especially apparent with Microsoft. Although Microsoft has taken a relatively moderate approach to capital expenditure—indicating that spending in the third quarter will fall from the record $37.5 billion between October and December—its stock took a hit last week, partly due to rising market concerns over its reliance on OpenAI.

Eric Clark, Portfolio Manager at LOGO ETF, bluntly summed it up:

"If you are a software company and you have ties with OpenAI, your attractiveness to investors is doubly diminished. Right now, Google has the upper hand."

Google Wins Wall Street's Confidence With Comprehensive AI Returns

Alphabet has won Wall Street's recognition by generating returns from AI investment across its entire company. This marks a complete turnaround from a year ago, when Alphabet was seen as seriously lagging in the AI race and its stock was punished.

In the February 4th earnings call, Alphabet executives appeared much more confident. This was the company's first earnings call following the launch of the Gemini 3 model. CEO Sundar Pichai stated:

"Overall, we’re seeing AI investment and infrastructure driving revenue and growth across the company."

Specific figures back up this confidence. Pichai revealed that by the end of the December quarter, monthly active users of Google Gemini applications had surpassed 750 million, up from 650 million in the previous quarter. While still behind ChatGPT—OpenAI CEO Sam Altman said in October that its weekly active users had surpassed 800 million—user engagement has risen significantly since Gemini 3’s launch.

On the enterprise side, Gemini's performance is equally impressive. The enterprise version of Gemini has reached 8 million paid licenses. More importantly, Google Cloud revenue soared 48% in the December quarter, far beating Wall Street expectations.

This all-around financial return emboldened Alphabet to announce it might double capital expenditures to $175 billion–$185 billion in 2026. Despite this "staggering" figure causing the stock to dip 6% in after-hours trading initially, the strong cloud business performance and overall AI-driven business growth quickly restored investor confidence, and the stock ended up flat.

Deutsche Bank Report: The "Major Shakeout" Within Tech Stocks Has Begun

The apparent calm in the market masks intense turbulence within tech stocks. On February 4, Jim Reid, Head of Global Macro and Thematic Research at Deutsche Bank, and his team published a report entitled "Tech Cannibalism" revealing the grim reality under the AI investment frenzy.

The report notes that although the S&P 500 Index remains near historical highs, this is largely due to funds rotating into defensive sectors and the exceptional performance of a few tech giants. Under the map of "real winners and losers," many targets related to AI, software, crypto, and private equity exposure have suffered "very brutal declines."

The report emphasizes that the market mindset has shifted decisively in recent months:

"The market has clearly moved from the mindset that 'every tech stock is a winner' to a much harsher reality: a landscape of real winners and losers."

Google as the Lone Savior: One Company Propping Up the Index's Boom

Deutsche Bank's research reveals an even more astonishing fact: the stability of tech stock indices is a statistical "mirage," actually sustained by Google alone.

In the past three months, Alphabet’s stock has risen nearly 25%; extending that to six months, the jump reaches a stunning 75%. This 75% increase translates to about $1.7 trillion in added market value. By comparison, Deutsche Bank points out that, aside from the "Magnificent Seven," most companies in the chart have market caps mainly in the tens of billions of dollars, with only a few reaching hundreds of billions.

Jim Reid bluntly notes: "Alphabet's returns over the past six months have singlehandedly offset a large part of the losses from other companies in this group." This largely explains why, even as many tech stocks are being sold off, the S&P 500 Index can still stay near record highs.

Alphabet’s deep financial reserves benefit from major deals it has signed in recent months with tech companies like Meta and Apple, supporting their products and infrastructure. Since the beginning of last year, Alphabet has risen from laggard to a leader among the "Magnificent Seven," currently matched only by Nvidia and Apple in exceeding $4 trillion in market value.

Deutsche Bank reaffirms its long-term view: real long-term beneficiaries will be those companies capable of deploying truly effective AI tools. These tools must ultimately become affordable, scalable, and deliver meaningful productivity gains. In reality, this likely means large organizations dealing with data-intensive, rule-driven workflows—in such processes, AI is more likely to "dramatically change output efficiency."

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