2 Artificial Intelligence (AI) Stocks That Won in 2025 Are Losing in 2026. Why This Is a Buying Opportunity
nvidia
| Source: The Motley Fool | Original article
Nvidia and SoundHound AI, the two AI‑heavy names that helped lift the S&P 500 to record highs in 2025, have turned into the year’s biggest laggards. Nvidia’s shares slipped about 8 % in the first quarter after a post‑earnings sell‑off erased most of the 2023‑2025 rally, while SoundHound AI tumbled roughly 22 % following a disappointing revenue forecast that signalled a longer path to scale.
The reversal reflects a broader shift in market dynamics. Higher interest rates and stubborn inflation have squeezed growth‑oriented valuations, and a wave of scepticism—sparked by an MIT study showing 95 % of firms see no return on generative‑AI spend and by Sam Altman’s public warning of an AI bubble—has cooled investor enthusiasm. Capital Economics now predicts the AI‑fuelled rally will unwind sharply in 2026, a view echoed by recent Fortune coverage of the sell‑off in Nvidia, Palantir and peers.
Despite the pain, the price drops may create a buying window. Nvidia still commands the dominant GPU ecosystem that underpins most generative‑AI workloads, and its data‑center backlog remains robust. SoundHound, though smaller, is expanding into voice‑assistant platforms and enterprise search, markets projected to grow at double‑digit rates through 2032. For investors with a long‑term horizon, the current valuations offer exposure to the sector’s structural growth at a discount to 2025 peaks.
Watch the upcoming earnings seasons for both companies, especially Nvidia’s Q2 results that could reveal whether its hardware demand is stabilising. Monitor Fed policy signals, as any further rate hikes would deepen the valuation gap, and keep an eye on regulatory developments—Altman’s blueprint for AI taxation and oversight could reshape capital allocation across the industry. A sustained rebound in corporate AI spending would validate the buying thesis, while continued skepticism could keep the stocks under pressure.
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