AI Investment Trends: Insights on Nvidia and Future Opportunities

Between 2023 and 2024, the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC) achieved impressive total returns of 58% and 87%, respectively, largely driven by advancements in artificial intelligence (AI). However, the story shifted in 2025, as investors faced panic-selling, particularly in the growth stock sector, amid concerns about President Donald Trump’s tariff policies.

Could the investor sentiment be overly pessimistic? It’s a possibility worth considering.

Recent Developments in the AI Sector

Let’s examine updates from leading companies in the AI field and the potential for semiconductor giant Nvidia (NASDAQ: NVDA) as it prepares to release its first-quarter results on May 28.

Rising AI Infrastructure Investments

In recent weeks, several corporations have released their Q1 financial results, emphasizing the growing demand for AI. Companies like Microsoft, Amazon, Alphabet, Meta Platforms, and Advanced Micro Devices are notably increasing their AI-related investments. Their capital expenditures (capex) and revenue trends provide valuable insight into the evolving AI market.

• Cloud Hyperscalers: Microsoft, Amazon, and Alphabet have diversified portfolios, but cloud computing remains a key growth driver. In Q1, Microsoft’s Azure cloud business reported a 35% year-over-year revenue increase on a constant-currency basis. Alphabet and Amazon followed with growth rates of 28% and 17%, respectively. These strong figures support the companies’ planned infrastructure budgets, and they reaffirmed their capex projections, collectively planning to invest $260 billion in AI capex this year.
• Meta Platforms: Meta has significantly increased its AI capex investments, which include ambitious projects like custom chips and AI-enabled hardware such as smart glasses and virtual reality headsets. The company spent $28.1 billion on capex in 2023, marking a 40% increase to $39.2 billion in 2024. During its Q4 2024 earnings call, Meta’s management projected capex between $60 billion and $65 billion for 2025. More recently, they raised this guidance to between $64 billion and $72 billion for 2024.
• AMD: The semiconductor sector has been sensitive to tariff-related market shifts, given the importance of China as a major market. During AMD’s Q1 earnings call on May 6, CEO Lisa Su acknowledged the uncertainties surrounding tariffs, but expressed confidence in ongoing infrastructure investments, expecting strong growth for AI infrastructure in the second half of the year.

“I know there are some uncertainties as it relates to tariffs and other things. But this is one of those areas where, from an infrastructure standpoint, there continues to be investment in AI infrastructure. And so with that, we would expect strong growth into the second half of the year.”
— Lisa Su, CEO of AMD

Image source: Getty Images.

Nvidia’s Stock Performance Post-Earnings

The chart below shows Nvidia’s stock price over the last three years, with quarterly earnings report dates highlighted. The stock has shown considerable growth during this period.

NVDA data by YCharts.

However, since Nvidia’s Q2 2024 earnings report in August, the stock has declined by approximately 9%. This decline indicates that Nvidia may not have been a strong performer in portfolios recently.

Is Nvidia a Buy Before May 28?

Despite underwhelming stock performance over the past year, Nvidia’s results have consistently impressed. The fluctuations in share price seem more tied to broader macroeconomic narratives than to the company’s performance.

Market influencers, such as the presidential campaign and Federal Reserve policy on inflation and interest rates, have contributed to uncertainty affecting growth stocks, even though they do not directly relate to AI or Nvidia.

Large tech companies’ commitment to investment lends credibility to the expected AI momentum. Su’s optimism about AMD’s next-generation chip architecture supports this notion, as she anticipates significant production scaling later this year.

Overall, these developments are promising for Nvidia’s future prospects.

NVDA Revenue (TTM) data by YCharts.

Moreover, analysts anticipate that Nvidia’s revenue and earnings may nearly double in the next two years. This positions the company well to dominate the AI infrastructure market in the foreseeable future.

Given these trends, it appears that Nvidia’s stock is a promising investment following its earnings report later this month, reflecting a potential buying opportunity.