First, just take a moment and enjoy how insanely adorable Baby Groot is. The sapling version of Groot, who will fight alongside his fellow teammates in Guardians of the Galaxy vol. 2 after his noble sacrifice in the first film, is just too cute. When you're done with that, you can check out the full version of the new concept art for the film that James Gunn revealed today (via Empire), featuring the team going all-out against some kind of giant space squid monster.
Gunn posted the image to his facebook page with no explanation of what we're seeing here, though the implication is it is from fairly early on in the film, as only the core returning members of the group: Drax, Star-Lord, Gamora, Rocket, and Baby Groot are pictured in battle. What they're battling is a head-scratcher as well. It first brings to mind the strange "Old God" style monsters of the Cancerverse, a conceptual alternate reality that made its first appearance in the Marvel Cosmic corner of the comic book universe a few years ago. It also brings to mind a much earlier film of Gunn's: Slither, which featured tentacled slug monsters (and starred Nathan Fillion and Michael Rooker). Gunn later identified the creature as "an Abilisk" in response to a fan's question about it. The creature made a brief appearance in the Guardians of the Galaxy Vol. 2 footage shown off at San Diego Comic Con back in July.
The reason we assume this is from early in the film is that we know Rooker's Yondu joins the team, as well as new character Mantis and fellow former villain Nebula in some capacity, so their absence implies it's before they join the fight - it could of course be from some other climactic battle as well.
We won't know for sure until the James Gunn written and directed film hits theaters next May, but the concept art should get Marvel fans guessing, speculating, and thanks to Baby Groot, surely smiling. Right-click the image to open in another tab or window to see a larger version.