To The Moon

Key Takeaways

• Nvidia and Broadcom shares surged Wednesday after Google parent Alphabet, a customer of both chipmakers, said it plans to ramp up spending on artificial intelligence. 

• Alphabet said Tuesday that it plans to spend as much as $75 billion in capital expenditures this year, with most of the funds set to go toward expanding its AI infrastructure.

• Alphabet CEO Sundar Pichai also told investors on the company’s earnings call that the tech giant intends to continue its “strong relationship” with Nvidia.

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Nvidia (NVDA) shares surged Wednesday, after Google parent Alphabet (GOOGL), a buyer of Nvidia’s chips, said it plans to ramp up spending on artificial intelligence (AI).

Alphabet said Tuesday that it plans to spend as much as $75 billion in capital expenditures this year, with most of the funds set to go toward expanding its AI infrastructure, including servers and data centers, to meet demand for AI.

That could benefit Nvidia, with Alphabet Chief Executive Officer Sundar Pichai telling investors on the company’s earnings call that the tech giant intends to continue its “strong relationship” with the chipmaker, after announcing its first customer running on Nvidia’s Blackwell platform last week. 

The announcement also comes just days after Meta Platforms (META) said it plans to spend $60 billion to $65 billion this year, and Microsoft (MSFT) said it expects to spend $80 billion on infrastructure in fiscal 2025.1

Broadcom Shares Also Advance on Alphabet Plans

Broadcom (AVGO), which designs custom AI chips for several large U.S. tech firms including Alphabet and Meta, also experienced a share-price jump Wednesday following the news. 

Shares of Broadcom were up nearly 6% at $235.69 in intraday trading Wednesday, while Nvidia jumped about 4% to $123.43. Several other chip stocks and shares of Nvidia partners, including chip designer Arm Holdings (ARM) and manufacturer TSMC (TSM), were higher as well.  

Arm is also set to report earnings after the bell Wednesday, along with chipmaker Qualcomm (QCOM)