Big Tech's AI Infrastructure Spending Set to Surge
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy NVDA?
Source: Fool
- AI Infrastructure Investment: Amazon, Alphabet, Microsoft, and Meta are projected to collectively spend about $650 billion on global AI infrastructure by 2026, reflecting a 60% year-over-year increase, indicating strong market demand and investment confidence in AI technologies.
- Nvidia's Market Outlook: Nvidia estimates that global AI infrastructure spending will reach $3 trillion to $4 trillion by 2030, positioning itself favorably in this historic infrastructure buildout with its full-stack AI platform and annual product releases.
- Broadcom's Market Share: Broadcom is expected to capture nearly 60% of the custom AI server chip market by 2027, as demand for high-performance custom chips from enterprises and hyperscalers continues to rise, suggesting significant growth potential for the company.
- Revenue Growth Potential: Broadcom exited fiscal 2025 with a consolidated backlog of $162 billion, including $73 billion in custom AI chips to be delivered over the next 18 months, which is likely to drive rapid revenue growth for the company.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 186.940
Low
200.00
Averages
264.97
High
352.00
Current: 186.940
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Successful Fundraising: In August 2025, Cohere raised $500 million, valuing the company at $6.8 billion, with investors including AMD, Nvidia, and Salesforce, reflecting market recognition of its capital-efficient model and strengthening its position in the competitive AI landscape.
- Improved Gross Margins: Cohere's gross margins averaged about 70% in 2025, expanding by 25 basis points year-over-year, demonstrating the company's ability to achieve sustainable growth by optimizing resource allocation and managing customer demand without being affected by market volatility.
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- Alphabet's Gemini Success: Alphabet's Gemini chatbot now boasts 750 million monthly active users, a 67% increase from nine months ago, and has secured a partnership with Apple to make Gemini the underlying AI model for an upcoming version of Siri, which is expected to generate billions in revenue for Alphabet.
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- Surge in AI Giants' Investment: Major clients of Nvidia, including Alphabet, Amazon, and Meta, have announced capital expenditure plans for 2026, with expected spending of $175 billion to $185 billion, $200 billion, and $115 billion to $135 billion respectively, which will drive demand for Nvidia's chips and further solidify its market position.
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- AI Investment: The company is increasing its investments in artificial intelligence and machine learning to enhance its vehicles' self-driving capabilities, a strategy that will further solidify Tesla's leadership position in the electric vehicle market.
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- Significant Revenue Growth: Cohere achieved approximately $240 million in annual recurring revenue in 2025, surpassing its $200 million target, indicating strong market demand that is expected to further enhance the company's market share in the AI sector.
- Successful Fundraising: In August 2025, Cohere raised $500 million, valuing the company at $6.8 billion, with investors including AMD, Nvidia, and Salesforce, reflecting market recognition of its capital-efficient model and strengthening its position in the competitive AI landscape.
- Improved Gross Margins: Cohere's gross margins averaged about 70% in 2025, expanding by 25 basis points year-over-year, demonstrating the company's ability to achieve sustainable growth by optimizing resource allocation and managing customer demand without being affected by market volatility.
- Market Expansion Plans: Cohere plans to continue expanding into the European market in 2026 and build its AI agent platform, North, anticipating another year of rapid growth, with the CEO indicating that the company is poised for a public market debut to attract more investor interest.
See More
Three Tech Giants Set to Benefit from AI Surge
- Nvidia's Market Leadership: As a leading designer of AI processors, Nvidia is poised to benefit from the increasing spending on AI data center infrastructure, particularly as Alphabet and Meta ramp up capital expenditures to $185 billion and $135 billion respectively, driving demand for Nvidia's processors.
- Alphabet's Gemini Success: Alphabet's Gemini chatbot now boasts 750 million monthly active users, a 67% increase from nine months ago, and has secured a partnership with Apple to make Gemini the underlying AI model for an upcoming version of Siri, which is expected to generate billions in revenue for Alphabet.
- Taiwan Semiconductor's Market Share: Taiwan Semiconductor holds a 70% share of the global semiconductor manufacturing market, with revenue projected to increase by 30% to $122.4 billion by 2025, and diluted earnings expected to rise by 47% to $10.65 per ADR, showcasing its strong performance amid surging AI processor demand.
- Long-Term Competitive Advantage: Research from Morningstar indicates that TSMC's organic growth driven by major tech trends could last for decades, with management confidently forecasting a 30% increase in sales this year, further solidifying its market position.
See More
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- Nvidia's Market Position: As the leading designer of AI processors, Nvidia's stock remains attractive despite bubble concerns, with a current P/E ratio of 47, slightly above the tech sector average of 43, indicating strong demand amid increasing AI infrastructure spending.
- Alphabet's AI Success: Alphabet's Gemini chatbot has reached 750 million monthly active users, a 67% increase in nine months, and its collaboration with Apple to integrate Gemini into Siri is expected to generate billions in revenue, further boosting its cloud computing growth.
- Taiwan Semiconductor's Competitive Edge: Holding a 70% market share in the global semiconductor market, TSMC's advanced chip manufacturing and high yield rates position it well, with projected revenue growth of 30% to $122.4 billion by 2025, reflecting strong performance amid surging AI processor demand.
- Optimistic Industry Outlook: All three companies excel in the AI sector, with reasonable P/E ratios of 47, 30, and 34 for Nvidia, Alphabet, and TSMC respectively, suggesting that investors can expect substantial returns over the coming years.
See More
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- Increased Market Volatility: Last week, stocks in software, real estate, financial services, and logistics faced selling pressure due to concerns over AI-related disruptions, with the Nasdaq Composite falling 0.2% and a weekly loss of 2.1%, indicating market sensitivity to AI impacts.
- Consumer Spending Data Focus: This week's highlight will be the Personal Consumption Expenditures (PCE) report on Friday, which will provide insights into consumer spending in December and inflation trends, especially following last week's unexpected slowdown in the Consumer Price Index (CPI).
- Corporate Earnings in Spotlight: Walmart (WMT) is set to release its fourth-quarter earnings on Thursday, marking the first report under new CEO John Furner, making it a key indicator of consumer spending that the market is eagerly anticipating.
- Ongoing AI Impact: As AI tools' potential effects intensify across various sectors, software stocks like Salesforce (CRM) and ServiceNow (NOW) have seen significant declines, reflecting the market's heightened vigilance regarding AI disruptions, necessitating close monitoring of future industry developments.
See More
Nvidia Set to Report Strong Earnings with Promising Guidance
- China Market Recovery: Following the Trump administration's ban on Nvidia chip exports to China in April 2025, Nvidia is expected to resume exports, and if first-quarter revenue expectations reach $8 billion, it could lead to unexpected growth, significantly boosting market confidence.
- Surge in AI Giants' Investment: Major clients of Nvidia, including Alphabet, Amazon, and Meta, have announced capital expenditure plans for 2026, with expected spending of $175 billion to $185 billion, $200 billion, and $115 billion to $135 billion respectively, which will drive demand for Nvidia's chips and further solidify its market position.
- New Architecture Driving Growth: Nvidia's upcoming Rubin chip architecture offers significant efficiency improvements over the previous Blackwell generation, requiring only one Rubin chip for every four Blackwell chips for AI model training, which will encourage more companies to upgrade their GPUs, thus driving sustained growth for Nvidia.
- Attractive Stock Valuation: While Nvidia's stock is often deemed expensive, its forward P/E ratio of less than 25 times is near its lowest level in three years, and a projected 20% price increase would bring it to a more reasonable 30 times forward earnings, making it a prime buying opportunity now.
See More
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- Autonomous Vision: Tesla CEO Elon Musk announced on Sunday that he expects the company to have the largest fleet of autonomous vehicles in the future, aligning with Tesla's long-term goals in the autonomous driving sector.
- Robotaxi Trials: Tesla is currently conducting trials of its Robotaxis in Austin, showcasing its advancements in self-driving technology and potentially laying the groundwork for future business models.
- AI Investment: The company is increasing its investments in artificial intelligence and machine learning to enhance its vehicles' self-driving capabilities, a strategy that will further solidify Tesla's leadership position in the electric vehicle market.
- Technological Competition: While Tesla relies heavily on cameras for its self-driving technology, Musk's vision contrasts with competitors like Waymo, which emphasizes standards that surpass human driving capabilities.
See More
