Big tech is spending like crazy on AI — ride the Nvidia and hyperscaler wave
The biggest tech companies in the world are pouring unprecedented sums into AI infrastructure, and JPMorgan says this is kicking off a multi-year profit boom for the whole market. Nvidia alone has booked nearly $20 billion in profit in just five months.
Idea
Meta, Microsoft, Amazon, and Alphabet are collectively committing jaw-dropping amounts of capital to build out AI infrastructure — and JPMorgan is calling it the start of an 'earnings supercycle' that pushes stocks to new highs. Nvidia has already booked nearly $20 billion in profit over just five months and its CEO is out pitching 'insane' returns to institutional investors. When the biggest spenders in the world simultaneously ramp investment in one technology, the suppliers and platforms that enable that build-out tend to see explosive revenue growth. This trade captures the direct beneficiaries of that spending wave using a simple trend-following approach — buy when these stocks are moving higher on rising participation, and step aside when momentum fades.
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News sources
- Nvidia Has Racked Up a Nearly $20 Billion Profit Over the Last 5 Months From an Unlikely Source — Yahoo Finance
- JPMorgan's Lipikhina Sees Earnings Supercycle Driving US Stocks — Bloomberg
- Meta, Microsoft, Amazon, and Alphabet are about to spend a shocking amount of money to dominate the AI era — Yahoo Finance