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Nvidia, Broadcom stocks up as Alphabet plans big AI spending spree

Feb 05, 2025 - markets.businessinsider.com
Alphabet's announcement to increase its capital expenditures to $75 billion in 2025, a significant rise from last year's $52 billion, has positively impacted chip stocks like Nvidia and Broadcom. Despite a drop in Alphabet's stock due to investor concerns over high spending, the move is seen as beneficial for chip makers, as it indicates continued investment in AI technologies. This comes amid fears of competition from China's DeepSeek AI model, which had previously caused a tech sell-off.

Other tech giants, including Meta, Microsoft, and Tesla, have also committed to substantial AI-related spending. Meta plans to increase its capital expenditures to $65 billion, while Microsoft aims for $80 billion in its 2025 fiscal year. Tesla anticipates its capital expenditures to exceed $11 billion in 2025 and the following years. Analysts view these commitments as part of an ongoing AI arms race among major tech companies, reinforcing the sector's growth prospects.

Key takeaways:

  • Alphabet plans to spend $75 billion on capital expenditures in 2025, significantly boosting chip stocks like Nvidia and Broadcom.
  • Alphabet's increased spending is part of a broader trend among tech giants like Meta, Microsoft, and Tesla, who are also ramping up AI investments.
  • Nvidia and Broadcom stocks rose significantly in response to Alphabet's capex announcement, indicating strong market confidence in AI-driven growth.
  • Analysts view Alphabet's spending as a positive sign for the AI sector, despite initial investor concerns over tech sell-offs and competition from China's DeepSeek AI model.
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