Big Tech’s AI Spending Boom Keeps Nvidia in the Spotlight
The massive surge in artificial intelligence (AI) spending by Amazon, Meta, Alphabet, and Microsoft is setting the stage for another big win for Nvidia — even before the chipmaker reports its own earnings.
Amazon’s upbeat cloud performance and renewed optimism last week cheered Wall Street, but it’s Nvidia that stands to benefit most from this new wave of tech investment. As Matt Stucky of Northwestern Mutual Wealth Management put it, “Companies are going to continue to spend on compute, and Nvidia is probably the best shop right now in terms of supplying it.”
Mizuho’s Jordan Klein echoed the sentiment, noting that “all roads lead back to Nvidia,” with secondary beneficiaries like Broadcom and Micron also in line for gains.
Big Tech Opens the Spending Floodgates
Meta plans to spend up to $72 billion in 2024, nearly doubling last year’s outlay. Amazon has budgeted $125 billion, while Alphabet raised its forecast to $92 billion. Microsoft, meanwhile, expects capital expenditures to accelerate faster than last year’s 58% growth rate.
All that money is flowing to one key place — the companies providing the compute power. “Where those dollars flow, they flow to the semiconductor companies,” said Stucky. “And Nvidia is the major one.”
Adding fuel to the fire, Nvidia CEO Jensen Huang recently hinted that Wall Street’s revenue estimates may be $100 billion too low for the next 18 months. Bernstein’s Stacy Rasgon suggested Nvidia could bring in “well over $300 billion” in data-center revenue next year, compared with consensus expectations of under $260 billion.
Is AI Spending Becoming a Bubble?
With AI budgets ballooning, investors are beginning to draw comparisons to the dot-com era. The big question: can end users — especially OpenAI — monetize the technology fast enough?
“For every dollar OpenAI takes in, two dollars are going out,” Stucky warned. Still, demand remains strong. Oracle’s recent bond deal tied to OpenAI capacity was oversubscribed, signaling confidence that monetization will eventually catch up.
Shifting Sentiment in Big Tech
While Nvidia remains the clear beneficiary, Amazon is now joining Alphabet in Wall Street’s “AI winners” club. Amazon’s cloud growth accelerated to over 20% in Q3, proving it’s still a leader in the space.
Investors have also shown more patience with Amazon and Alphabet’s spending than with Meta’s, given how each company approaches monetization. Hyperscalers like Amazon and Google can quickly turn AI infrastructure into revenue, while Meta’s path depends more on advertising and future “superintelligence” goals — which carry higher uncertainty.
“Zuckerberg is promising the ROI is going to be there,” Stucky said. “But the further they go, the greater the risk that number won’t hold.”
For now, analysts see Meta’s payoff coming later — possibly by 2027 — while Nvidia and the cloud giants reap more immediate benefits from the AI buildout.
