Technology Giants Microsoft, Alphabet, and Meta Platforms (Facebook's parent company) Announce Favorable Developments for Nvidia Stock Holders
In the rapidly evolving tech landscape, major players such as Microsoft, Alphabet, and Meta Platforms continue to invest heavily in data center construction for artificial intelligence (AI).
Microsoft, for instance, anticipates a growth in capital expenditure for the fiscal year 2026, although not at the same pace as in 2025. On the other hand, Meta Platforms expects a significant slowdown in capital expenditures in 2026, following a strong investment phase. The broader hyperscaler Capex for AI reached $368 billion in the previous period, with a slowdown expected to start in late 2025 and continue into 2026.
Meta Platforms' capital expenditures are projected to rise by $30 billion year over year for 2025, nearly doubling from the previous year. Alphabet has also raised its 2025 capital expenditure guidance from $75 billion to $85 billion and plans to further increase this figure to meet customer demand. However, Alphabet has yet to disclose its 2026 capital expenditure plans.
Nvidia, a company primarily focused on selling graphics processing units (GPUs) and related hardware and software, has been heavily impacted by the revocation of its China export license for its H20 chip in April. This decision crippled sales of the H20 chip, but Nvidia has since reapplied for an export license, with assurances from the U.S. government that it will be approved.
The return of H20 chip sales in Q3 is expected to bolster Nvidia's growth rate for the next year. In fact, Nvidia anticipates 50% revenue growth for Q2 of fiscal year 2025, with the H20 chips contributing an estimated $8 billion in sales during Q2, had the export license not been revoked.
Nvidia's largest demand for GPUs comes from data centers built for AI, and the company expects China sales to bolster its revenue growth rate moving forward. The strong demand for Nvidia's products, coupled with the anticipated return of the H20 chip sales, indicates that Nvidia's growth will remain strong for at least another couple of years.
Microsoft, Alphabet, and Meta Platforms are among the largest spenders on data center construction for AI, and their continued investments suggest a robust future for the AI sector. However, the broader trend of a potential slowdown in AI-related investments by hyperscalers in 2026 remains a factor to watch.
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