Nvidia stock surges after Meta, Microsoft reaffirm AI focus
Nvidia (NVDA) stock rose as much as 4.3% early Thursday, leading chip stocks higher after Big Tech leaders Meta (META) and Microsoft (MSFT) reaffirmed their aggressive AI investment plans.
Shares of fellow AI chipmakers Advanced Micro Devices (AMD) and Broadcom (AVGO) jumped 1.3% and 2.4%, respectively. Nvidia supplier Micron (MU), which makes advanced memory chips for its GPUs (graphics processing units), climbed 2.7%, News.Az reports, citing foreign media.
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 artificial intelligence 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 and $72 billion, up from its prior range of $60 billion to $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,” Meta CFO Susan Li said.
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 canceling 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), Amazon (AMZN), and Microsoft — and Meta set to spend north of $330 billion at maximum this year.
Those investments have come under some scrutiny as investors await an AI payoff and Big Tech’s monetization of the technology relative to its investments remains murky.
Meta said 30% more advertisers are using its AI tools and that Meta AI has “almost 1 billion” monthly active users,” but it didn’t specify how much AI contributed to its first quarter earnings results, which beat expectations.
Microsoft’s Intelligent Cloud segment, which includes its AI business, rose 21% from the prior year to nearly $27 billion. Microsoft said its Azure cloud service, which falls within that segment, saw revenue jump 35% from the prior year, with AI contributing 16 percentage points of that growth. Still, that revenue is far lower than Microsoft’s dollar figure for investments in AI in the past several years.
Meta stock rose 6% Thursday morning, while Microsoft jumped 10%.
Nvidia’s gain Thursday helped pare its year-to-date losses, with the stock down roughly 19% as of the end of Wednesday’s trading session, more than the S&P 500’s 5% drop.
Nvidia's gain also comes after the stock was issued a rare Sell rating by analysts at investing firm Seaport Wednesday, who said that the benefit of AI to tech stocks has been priced in for now.
Nvidia stock has also suffered as President Trump introduces restrictive trade policies that would hinder the chipmaker’s business abroad, particularly with China, as global competition heats up.
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