- Nvidia (NVDA) shares surged nearly 5% in early trading Thursday, driven by strong AI demand signaled by Microsoft (MSFT), Meta (META), and Alphabet (GOOGL), countering a 19% year-to-date stock decline amid U.S. AI chip export restrictions and overbuild fears.
- Meta raised its 2025 capital expenditure guidance by 9% to $64 billion–$72 billion, exceeding $60 billion estimates, while Microsoft and Alphabet reaffirmed significant AI-focused spending.
- Amazon (AMZN) is expected to report a 35% capital expenditure increase for 2025 and 15% for 2026, reinforcing the industry’s aggressive AI investment trend, which analysts view as a strong positive for Nvidia’s chip demand.
The robust demand for artificial intelligence infrastructure, underscored by strong quarterly performances from Microsoft (MSFT), Meta Platforms (META), and Alphabet (GOOGL), propelled Nvidia (NVDA) shares nearly 5% higher to $114.06 in Thursday’s early trading, signaling a potential reprieve for investors navigating a challenging year. Nvidia, a linchpin in the AI ecosystem due to its powerful chips, has faced headwinds in 2025, with its stock declining 19% amid the Trump administration’s restrictions on AI chip exports to China and concerns over domestic capacity overbuilds. However, the reaffirmed commitment to AI investment from major technology firms countered bearish sentiment, highlighting sustained momentum in the sector.
Meta Platforms raised its 2025 capital expenditure guidance by 9% to a range of $64 billion to $72 billion, surpassing consensus estimates of $60 billion, as executives emphasized increased investments in AI buildouts and rising infrastructure hardware costs. Mark Zuckerberg, Meta’s CEO, affirmed the company’s strategic pivot, stating that resources are increasingly focused on AI development. Microsoft, reporting better-than-expected performance across its segments, particularly in its enterprise-focused Azure cloud business, reiterated its full-year capital expenditure guidance, with CFO Amy Hood noting accelerated spending among its largest customers. Alphabet, having reported first-quarter earnings last week, maintained its $75 billion capital expenditure plan, further reinforcing the industry’s aggressive AI investment trend.
The market’s optimism extended to expectations for Amazon (AMZN), set to announce its results after Thursday’s close, with Citi (C) analysts projecting a 35% increase in Amazon’s capital expenditures for 2025, followed by a 15% rise in 2026. These projections align with the broader narrative of unrelenting AI spending, as noted by Citi analyst Chris Danely, who observed that fears of slowing capital expenditures were unfounded. Wedbush analyst Dan Ives encapsulated the sentiment, declaring that major technology firms’ unwavering commitment to AI infrastructure was a significant positive for Nvidia, countering earlier concerns about decelerating growth.
Nvidia’s pivotal role in powering AI applications has made its performance a bellwether for the sector, and the reaffirmed spending plans from industry giants suggest that demand for its chips remains robust despite geopolitical and market uncertainties. The company’s stock, though battered in 2025, found support from the collective strength of its key customers, who are doubling down on AI as a cornerstone of their growth strategies. As the AI landscape continues to evolve, Nvidia’s fortunes appear closely tied to the sustained capital commitments of its ecosystem partners, with the latest earnings season offering a clear signal that the AI boom is far from over.
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