Positive Spending Trends Signal Growth for Nvidia in 2025
To anticipate a company’s sales trajectory, it’s wise to monitor what major clients are saying about their spending habits. For Nvidia (NASDAQ: NVDA), this involves examining investment plans from hyperscaler cloud service providers like Amazon.com‘s Amazon Web Services, Alphabet‘s Google Cloud, and Microsoft‘s Azure—especially any changes in their strategies.
Strong Investment Pipeline for Data Centers
The outlook for data center investment remains robust, as noted by equipment providers like Vertiv. The capital spending plans of key cloud service providers align with this positive perspective.
The outlook for spending in 2025 is particularly promising for Nvidia. For instance, Amazon’s capital expenditures on property and equipment were $83 billion in 2024. During its February earnings call, CFO Brian Olsavsky projected a run rate of $26.3 billion for 2025, translating to an estimated total spend of $105.2 billion, mostly focused on enhancing technology infrastructure, particularly for AWS.
In addition, Alphabet’s capital expenditures reached $52.5 billion in 2024. CFO Anat Ashkenazi indicated plans to increase that to $75 billion in 2025, emphasizing investments in technical infrastructure, particularly servers, data centers, and networking.
Microsoft is also poised for growth, as Vice Chair and President Brad Smith highlighted plans to invest $80 billion in the fiscal year 2025 to enhance its AI-enabled data centers. Notably, the company has doubled its data center capacity over the last three years, reflecting substantial growth in this area.
Image source: Getty Images.
Ongoing Demand for Nvidia’s Products
The trends indicating strong spending on AI-related data centers are encouraging. Unless there are significant changes to the capital expenditure plans or management outlooks from these key players, Nvidia is positioned for another successful year ahead.
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