Tunahan Kukurt, Ali Canberk Ozbugutu, and Emir Yildirim
09 April 2025•Update: 09 April 2025
ISTANBUL
Eight out of the world’s top 10 artificial intelligence (AI) companies’ shares declined in the first quarter of the year, led by macroeconomic developments and US President Donald Trump’s protectionist trade rhetoric.
Among the most valuable AI companies in the world, Apple reigned supreme with $3.27 trillion in value, followed by Microsoft with $2.8 trillion, Nvidia with $2.68 trillion, Alphabet (Google) $1.9 trillion, Meta Platforms $1.5 trillion, Tesla $848 billion, Oracle $395 billion, IBM $226 billion, and Palantir with $201 billion.
The Nasdaq 100 index and AI firms followed a volatile course in the first quarter of the year due to high interest rate estimates, competition concerns in the AI sector due to the rise of free and open-source Chinese AI, and uncertainties over trade, while rate cut expectations came to the fore and pressures technology stocks.
While Palantir and IBM shares climbed 14% and 11%, respectively, Meta Platforms lost 1.5%, Microsoft 10%, Apple 13%, Oracle 15%, Alphabet 18%, Nvidia 18%, and Tesla was down by 35%.
Despite the strong balance sheets, slowing inflation estimates, and the rise of the Nasdaq 100 index on tech investments last year, the recent developments hampered the growth.
Chinese DeepSeek AI also sent shockwaves into the AI market, while giving rise to concerns that these industry-leading firms could lose market share, and ultimately led to the sharpest daily decline of the year in the Nasdaq 100.
Trump’s sweeping tariffs kept global growth concerns high and the Fed’s cautious stance dampened risk appetite, further limiting the upward momentum in the index.
Felix Schmidt, senior economist at Berenberg, told Anadolu that while AI played a key role in the Nasdaq 100 last year, the rises cannot be attributed to AI alone, since gradually declining inflation in the US and the re-election of Trump for his second term brought many gains, as markets were on the lookout for tax cuts and regulations to loosen up after his victory.
Schmidt noted that the reactions to Trump’s tariffs eclipsed these gains and the enthusiasm in the market.
He mentioned that AI is a permanent aspect of economies now, as more and more industries will use it in their operations, emphasizing its importance and influence.
He underlined that the AI will maintain this position on the markets, especially since the release of DeepSeek, which revealed to the world that new players with fewer funds and technological prowess -- as the model used older-generation hardware -- can find a place, but for the AI-led rise to continue, stability needs to be established both in politics and economy.
Schmidt warned that the current protectionism in trade creates more uncertainty and could lead to renewed inflation, which in turn could lead the Fed to raise interest rates. He added that Trump needs to abandon this approach and that it will be positive for stock markets.
