Jensen Huang-led Nvidia Corporation NVDA is poised to dominate as major tech players Meta Platforms, Inc. META, Alphabet Inc.’s GOOG GOOGL Google, and Microsoft Corporation MSFT ramp up their capital expenditures on artificial intelligence.
What Happened: On Tuesday, Wedbush analyst Dan Ives took to X, formerly Twitter, and predicted a strong performance from Nvidia, calling it the “only game in town with $1 trillion of AI Cap-Ex on the way.”
“We believe $2 billion beat/$2 billion guide higher,” Ives concluded.
Mark Zuckerberg’s Meta, which reported its third-quarter financial results last month, exceeded its capex spending forecasts, driven largely by AI investments. The company raised the lower end of its 2024 capex guidance by $1 billion to $38 billion, with a significant increase anticipated in 2025.
Google’s parent company is also set to match its capex spending in the fourth quarter, bringing its total 2024 capex to $51.4 billion, a 59% increase year-over-year. The company also anticipates a rise in apex in 2025, albeit at a slower rate.
Similarly, Microsoft reported a capex of $20 billion for the first quarter, nearly double the $11.2 billion from the same period last year. The company’s CFO Amy Hood expects a sequential increase in capital expenditure due to the projected demand for cloud and AI services.
Why It Matters: Analysts have predicted a “beat-n-raise” performance in Nvidia’s third-quarter earnings, with an expected revenue of $33.12 billion, a significant increase from last year’s $18.12 billion. The tech giant will report earnings on Wednesday, Nov. 20.
Despite recent overheating issues with Nvidia’s new Blackwell AI chips, the company’s value is expected to surge, driven by the potential of the next-generation AI chip. Earlier in September, Analyst Beth Kindig of I/O Fund projected a $10 trillion valuation for Nvidia.
Price Action: Nvidia shares rose 4.89% on Tuesday, closing at $147.01, with an additional 0.46% gain in after-hours trading, reaching $147.69 at the time of writing, according to data from Benzinga Pro.
Image via Unsplash
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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