Nvidia (NVDA) stock rose as much as 4.9% Thursday morning before the market open, leading chip stocks higher after Big Tech leader Meta (META) and Microsoft (MSFT) reaffirmed their aggressive AI investment plans.
Shares of fellow AI chipmakers Advanced Micro Devices (AMD) and Broadcom (AVGO) jumped 2.6% and 2.8%, respectively. Nvidia supplier Micron (MU), which makes advanced memory chips for its GPUs (graphics processing units), climbed 2.9% in premarket trade.
The gains follow earnings reports from tech giants Microsoft and Meta late Wednesday that saw the companies affirm — or in Meta’s case, boost — their investments in AI infrastructure, as the companies look to increase data center capacity to power AI efforts.
Microsoft reiterated its $80 billion spending plan to build out AI data centers, with more than half of that spending going toward the US. Meta, meanwhile, raised its capital expenditure outlook for 2025, forecasting spending will now fall between $64 billion-$72 billion, up from its prior range of $60 billion-$65 billion.
“This updated outlook reflects additional data center investments to support our AI efforts as well as an increase in the expected cost of infrastructure hardware. The majority of our CapEx in 2025 will continue to be directed to our core business,” said Meta chief financial officer Susan Li.
Microsoft’s CFO Amy Hood said: “We remain committed to investing against the strong demand signals we see for our services,” adding that its investment plans for its 2026 fiscal year, which starts in July, remain unchanged.
“We expect CapEx to grow,” Hood added. “It will grow at a lower rate than FY ’25 and will include a greater mix of short-lived assets, which are more directly correlated to revenue than long-lived assets. These investments along with focused execution that delivers near-term value to our customers will ensure we continue to lead through the cloud and AI opportunity ahead.”
Investors had been anxious about a potential pullback in AI investments from Microsoft, with the company reportedly cancelling some of its data center projects.
Microsoft and Meta are some of Nvidia’s biggest customers, contributing an estimated $20 billion and $9 billion to the chipmaker’s 2024 revenue, respectively, according to a DA Davidson analysis.
Big Tech has gone all in on AI, with the three Big Tech “hyperscalers” — operators of massive data centers, including Google (GOOG) and Amazon (AMZN) as well as Microsoft — and Meta set to spend north of $330 billion at maximum this year.
