Google's Gemini 3 advances shake up AI competitive landscape

Investing.com -- The artificial intelligence landscape is experiencing a significant shift as Google’s recent advances with its Gemini 3 model create volatility across AI-related stocks.

Google parent Alphabet (NASDAQ: GOOGL) saw its stock rise over 4% on Monday, adding to last week’s gain of 8%, while Nvidia (NASDAQ: NVDA) fell 6% last week as investors reassess competitive positioning in the AI race.

According to Melius Research analyst Ben Reitzes, Google’s AI comeback represents the most important issue in AI right now. The November 18 release of Gemini 3 Pro with its new Deep Think reasoning mode has impressed analysts with benchmarks and pricing that outperformed expectations, especially compared to Microsoft’s recent Ignite conference and ChatGPT 5’s August release.

Gemini 3 topped benchmarks for coding, tool use, math, science, and multimodal reasoning. The model is immediately available across Google’s ecosystem and third-party platforms like GitHub and Replit, potentially helping Google’s profitable API business.

Google’s custom TPU chip, now in its seventh generation, has become a significant advantage. Reitzes notes that Gemini 3 was trained primarily on Google TPUs, giving Alphabet a price advantage. Outside of Nvidia’s GPUs, the TPU is considered the most proven AI chip with the most tangible momentum.

This progress has created concerns for OpenAI, with CEO Sam Altman acknowledging in an internal memo that Google’s advances could create "temporary economic headwinds." This admission, combined with reports of slower user growth, has impacted investor confidence in OpenAI and affected stocks like Oracle, AMD, Microsoft, CoreWeave, Broadcom, and Nvidia.

AMD and Oracle appear most exposed to OpenAI’s success. AMD has fallen 23% from its October high, while Oracle is down 39% from its September peak. AMD’s deal with OpenAI involves adding 6GW of capacity starting in the second half of 2026, while Oracle has included a $300 billion deal with OpenAI in its RPO backlog.

For investors seeking safer options amid AI volatility, Reitzes suggests Apple (NASDAQ: AAPL), IBM (NYSE: IBM), and Cisco (NASDAQ: CSCO). Apple is described as a "toll road" to mobile AI that can benefit regardless of which company ultimately dominates the AI race. The analyst maintains a Buy rating on Apple with a $345 price target.

IBM offers stability through its mainframe cycle and infrastructure software, with promising developments in quantum computing. Cisco is gaining ground selling optics to hyperscalers for AI while benefiting from a campus switching cycle in enterprise.

Meanwhile, Adobe (NASDAQ: ADBE) faces challenges from Google’s AI image generation and editing tools, which could potentially draw users away from Adobe’s Creative Cloud ecosystem despite their partnership to integrate Gemini 3.

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