Google's New Artificial Intelligence Model Causes Market Fluctuations

Google’s new Gemini 3 model is creating significant fluctuations in the markets with advancements in artificial intelligence (AI). Alphabet (NASDAQ:GOOGL) saw an increase of over 4% on Monday and added 8% gain in the previous week.

On the other hand, Nvidia (NASDAQ:NVDA) lost 6% in value last week. Investors have started to reassess their competitive positions in the artificial intelligence race. Melius Research analyst Ben Reitzes describes Google's comeback in the AI field as the most significant issue in AI right now.

Gemini 3 Pro is set to launch on November 18 and, along with the new Deep Think reasoning mode, analysts note that this model is impressive with pricing and performance that exceed expectations. This model raises the standards in programming, driving, mathematics, science, and multimodal reasoning to the highest level.

This model, which can be readily used in Google’s ecosystem and on third-party platforms like GitHub and Replit, may assist Google in its profitable API business. Google’s seventh-generation custom TPU chip offers a significant advantage; Reitzes emphasizes that Gemini 3 is mostly trained on Google TPUs, providing a cost advantage for Alphabet.

These developments create concerns for OpenAI. OpenAI CEO Sam Altman acknowledged in an internal memo that Google’s advancements could create “temporary economic headwinds.” This admission has led to a decrease in confidence in OpenAI alongside slowing user growth, negatively affecting stocks such as Oracle, AMD, Microsoft, CoreWeave, Broadcom, and Nvidia.

AMD and Oracle appear to have greater exposure to OpenAI’s success. AMD has dropped 23% since its peak in October, while Oracle has fallen 39% below its September high. AMD’s agreement with OpenAI includes adding 6GW of capacity starting in the second half of 2026, while Oracle has included a $300 billion deal with OpenAI on its RPO waiting list.

If investors are looking for safer options amid fluctuations in artificial intelligence, Reitzes recommends Apple (NASDAQ:AAPL), IBM (NYSE:IBM), and Cisco (NASDAQ:CSCO). Apple is described as a “paid path” for mobile AI that can benefit regardless of which company dominates the AI race. The analyst has a Buy rating on Apple and sets a target price of $345.

IBM offers stability through its mainframe cycle and infrastructure software while gaining attention for advances in quantum computing. Cisco is making progress in optical sales for hyperscalers for AI and also benefits from campus switching cycles in enterprise sectors.

Meanwhile, Adobe (NASDAQ:ADBE) is facing challenges from Google’s AI image generation and editing tools; these tools could attract users away from Adobe’s Creative Cloud ecosystem, even though they have formed a partnership to integrate with Gemini 3.