Latest quarterly earnings reports indicate that tech giants show no signs of slowing down their massive investments in artificial intelligence infrastructure in the near term. Companies such as Alphabet (GOOGL), Meta Platforms (META), and Microsoft (MSFT) have all expressed firm commitments to AI-related spending. This has directly fueled a rapid surge in industry capital expenditure. The total capital expenditure of major tech companies in 2024 is projected to reach $228 billion, significantly higher than the $144 billion in the previous year. Furthermore, forecasts suggest this figure will rise to $360 billion in 2025 and jump further to $439 billion in 2026. Even more noteworthy is that companies’ actual spending plans appear more aggressive than generally expected.
Meta Platforms has raised its capital expenditure forecast for this year to a median of $71 billion, up from previous expectations. The company’s management explicitly stated that its computing capacity continues to grow significantly and expects “capital expenditure growth in 2026 to be substantially higher than in 2025.” Based on the 2024 capital expenditure of $39.2 billion, Meta’s spending this year is expected to surge by 81%, indicating that capital expenditure in 2026 will likely surpass the $100 billion mark. Similarly, Alphabet has raised its 2026 capital expenditure forecast from $85 billion to $92 billion. This is driven by a 46% quarter-on-quarter increase in Google Cloud’s backlog to $155 billion last quarter, as well as strong demand fueled by the solid adoption of its self-developed AI products like Gemini.
Microsoft’s situation similarly reflects robust market demand. Its remaining performance obligations for the latest fiscal quarter surged by 51% to $392 billion, with the company explicitly stating that “demand continues to far exceed our existing capacity.” This persistent shortage in data center capacity is expected to last throughout the fiscal year, inevitably stimulating further capital investments. Microsoft’s capital expenditure for the first quarter of fiscal year 2026 has already increased to $34.9 billion, exceeding previous estimates. Moreover, the company is on track to accelerate capital expenditure growth this fiscal year, reversing earlier expectations of a slowdown in spending growth. These signs strongly suggest that spending on data center equipment, such as graphics processing units (GPUs), is highly likely to accelerate.
The massive spending plans of tech giants will ultimately translate into orders for upstream core hardware suppliers. As a leader in artificial intelligence chips, NVIDIA (NVDA) is well-positioned to potentially exceed expectations in its 2026 performance. Its latest-generation Blackwell data center GPUs are already being deployed by major companies. CEO Jensen Huang revealed that the company has shipped 6 million Blackwell processors over the past four quarters and expects total shipments to reach 20 million. Compared to the 4 million shipments of the previous-generation Hopper processors, this signifies substantial growth potential. Currently, NVIDIA has secured chip orders worth over $500 billion, which will extend through the end of next year and include reservations for its next-generation Rubin processors. Consequently, NVIDIA is highly likely to surpass the current market revenue forecast of $285 billion for the upcoming fiscal year 2027, achieving stronger-than-expected growth. Continued investment in AI infrastructure will further drive NVIDIA’s chip sales and business growth.
