Nvidia (NVDA) bulls could breathe a sigh of relief on artificial intelligence demand in the wake of big quarters from Microsoft (MSFT) and Meta (META) late Wednesday.
Nvidia stock popped nearly 5% in premarket trading on Thursday as the two software giants signaled strong demand for AI tools and a desire to keep spending aggressively to build out AI infrastructure. Nvidia’s powerful chips are at the heart of the AI movement.
“Contrary to investors’ worries of slowing capex, it appears that spending for AI continues to be unabated,” Citi analyst Chris Danely wrote in a note.
Meta raised its 2025 capital expenditure guidance by 9% to a range of $64 billion to $72 billion. Consensus estimates were for about $60 billion. Meta execs said the hike reflects the support of AI buildouts and higher costs for infrastructure hardware.
“We continue to increase our investments and focus more of our resources on AI,” Meta CEO Mark Zuckerberg said on the earnings call.
Meanwhile, Microsoft reiterated its full-year capital expenditure guidance. It expects capital expenditures to grow year over year.
“In general, we saw better-than-expected performance across our segments, but we saw acceleration in our largest customers. We call that the enterprise segment in general,” Microsoft CFO Amy Hood told analysts on a call.
Alphabet (GOOGL) also reaffirmed its $75 billion capital expenditure plans when it reported first quarter earnings last week.
Amazon could offer up a similar tone when it announces results today after the close. Citi expects Amazon’s capital expenditures to grow by 35% in 2025 and by 15% in 2026.
Nvidia investors have waded through an un-Nvidia-like year so far.
Shares are down by 19%, hit by the one-two punch of the Trump administration’s crackdown on AI chip exports to China and fears of capacity overbuilds in the US. The read-through to Nvidia has been that while it will still likely have a big year financially, growth rates may not be at the stellar pace delivered in 2024.
But the first quarter results from Microsoft, Alphabet, and Meta poke a hole in that bearish narrative.
“Christmas came early for Nvidia. Big tech not slowing down AI spend,” Wedbush tech analyst Dan Ives told Yahoo Finance.
Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram and on LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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