Big Tech doubling down on $85B AI spending — long the infrastructure buildout
Google's parent company, Alphabet, just increased its fundraising goal to a massive $85 billion to pay for artificial intelligence infrastructure. At the same time, major financial institutions like JPMorgan are predicting that this heavy AI spending will create a surge in profits that drives the whole stock market higher.
Idea
When the biggest tech companies drastically increase their spending budgets, the companies that supply them with data center chips and cloud software typically see a huge jump in their own revenue. Alphabet, Microsoft, and Amazon are leading this charge, creating a ripple effect that benefits AI hardware providers like Nvidia. Because Wall Street experts now expect an earnings 'supercycle' from this exact spending, buying the companies building the actual AI infrastructure should yield strong returns as those profits are realized.