The results of technology giants in the US largely disappointed this earnings season — but they brought a lot of good news for Nvidia.
The chipmaker’s biggest customers, including Microsoft, Alphabet, Amazon.com e Meta Platforms, have promised to inject more into capital spending next year. The four companies invested a total of $59 billion in data center equipment and other fixed assets in the third quarter, marking a record for the period, according to data compiled by Bloomberg.
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The tech giants’ spending plans were exactly what optimists were looking for to keep Nvidia stock rallying. Shares have nearly tripled this year and rose 4.1% to close at a record high on Wednesday amid broad stock market gains following Donald Trump’s election victory. The Santa Clara, California-based AI chipmaker overtook Apple to once again become the world’s most valuable company this week.
The profits of big techs also paint an optimistic picture ahead of Nvidia’s own results, scheduled for November 20th. The company’s shares lost nearly $900 billion in market value from a peak in June to a trough in August amid questions about returns on AI investments and delays for its new Blackwell chips. They have since recovered, helped by assurances from CEO Jensen Huang that Blackwell’s production is on track. The latest evidence of robust AI spending has further eased concerns.
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Wall Street analysts are extremely positive on Nvidia, with 67 of 75 analysts tracked by Bloomberg rating the stock a “buy.” They have also continued to raise estimates, with profit forecasts for next year rising about 10% over the past three months, according to data compiled by Bloomberg. This helped moderate Nvidia’s valuation. The price-to-earnings ratio is now around 39 times, down from last year’s peak of more than 60 times.
William Blair analysts Sebastien Naji and Jason Ader are among those boosting fiscal 2026 estimates, writing in a recent note that “our confidence in Nvidia’s ability to maintain its market-leading position for AI infrastructure has only been reinforced.” It appears to be full steam ahead” for AI, they said.
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UBS Wealth Management estimates that Big Tech companies’ annual spending on AI will increase by 50% this year to $222 billion, and then another 20% in 2025.
“Microsoft, Alphabet, Amazon and Meta are responsible for nearly half of all AI spending, and their strong balance sheets and willingness to invest will likely continue to support strong growth in AI spending,” said Solita Marcelli, Director investment portfolio for the Americas at UBS Global Wealth Management.
Investors should “take advantage of short-term volatility to build sufficient exposure to quality AI stocks,” she said.
