AI spending wave is just getting started — buy the dip on Nvidia and Alphabet
JPMorgan says an earnings 'supercycle' powered by massive AI spending is about to push U.S. stocks even higher. Alphabet just committed $80 billion to build AI infrastructure, and Nvidia's CEO is publicly telling big investors the returns on AI will be 'insane.'
Idea
The biggest spenders on AI — companies like Alphabet, which is raising $80 billion — are essentially locking in years of demand for chipmakers and cloud providers. JPMorgan's research team is calling this an earnings 'supercycle,' meaning company profits are likely to keep surprising to the upside quarter after quarter. Nvidia's CEO is so confident he's personally pitching the opportunity to billionaire investors, and the company has already booked nearly $20 billion in profit in just five months from a surprising source. When the largest Wall Street bank and the leading AI chipmaker are both this bullish at the same time, buying the leaders on any short-term dip makes sense.