Shares of leading semiconductor companies, including Nvidia (NVDA) and Broadcom (AVGO), surged on Wednesday following an announcement from Google parent Alphabet (GOOGL) about its aggressive capital expenditure plans aimed at expanding artificial intelligence (AI) infrastructure.
Nvidia, one of the leading suppliers of AI chips, was among the biggest beneficiaries of Alphabet's announcement. Alphabet CEO Sundar Pichai reaffirmed the company's commitment to maintaining a "strong relationship" with Nvidia during an earnings call, emphasizing its ongoing reliance on the chipmaker's technology. This follows last week's announcement that Alphabet had onboarded its first customer running on Nvidia's Blackwell platform, further solidifying the partnership between the two tech giants.
Massive AI Spending Across Tech Giants
Alphabet's investment plans come on the heels of similar spending commitments from other major players in the AI space:
Meta Platforms (META) plans to allocate $60 billion to $65 billion this year for AI and data center expansion.
Microsoft (MSFT) projected an even larger $80 billion investment in infrastructure for fiscal 2025.
These spending figures underscore the fierce competition among tech giants to build out AI capabilities, fueling demand for semiconductor firms that supply the chips powering this next-generation technology.
Broadcom Rallies on Alphabet's AI Push
Broadcom (AVGO), which designs custom AI chips for major U.S. tech firms, including Alphabet and Meta, saw its stock surge following the announcement:
Broadcom shares jumped nearly 6% to $235.69 in intraday trading Wednesday
Nvidia stock climbed about 4% to $123.43
Other chip-related stocks, including Arm Holdings (ARM) and Taiwan Semiconductor Manufacturing Company (TSMC)—both key players in the AI supply chain—also traded higher.
Upcoming Earnings Reports to Watch
Investors are keeping a close eye on upcoming earnings reports from major chip companies:
Arm Holdings (ARM) is scheduled to report after the closing bell Wednesday.
Qualcomm (QCOM) is also set to release earnings later in the day.
As AI adoption continues to accelerate, the battle for dominance in AI chip production is intensifying, with Nvidia, Broadcom, and other semiconductor leaders at the center of the action.
