Nvidia will dominate Big Tech’s earnings season again
Subscribe to enjoy similar stories. It’s never a great sign when what’s going out the door gets more attention than what’s coming in. The world’s largest tech companies should at least be getting used to that by now.
More than a year into the so-called AI revolution, the most eye-popping changes have come to their cash-flow statements. Microsoft, Amazon.com, Google parent Alphabet and Meta Platforms, which owns Facebook and Instagram, parted with a combined $106.2 billion in capital spending during the first half of this year. That is up 49% from the same period a year earlier, with most of the increase going for chips from Nvidia and other infrastructure to power generative artificial intelligence services.
All of the aforementioned companies signaled plans three months ago to keep their foot on the gas. Thus, Wall Street expects their combined capital bill to top $60 billion in the quarter ended September, up 56% year over year, according to consensus estimates from Visible Alpha. Another sizable double-digit jump is expected for the December quarter, which would bring the year’s total outlay to about $231 billion, some 49% higher than 2023.
Expectations for next year aren’t exactly down to earth either. “In 2025, Cloud Capex spend will equate to the entire Apollo Space program in real terms," Morgan Stanley analysts predicted in a report earlier this month. This particular moonshot is great news for Nvidia.
The company’s data-center revenue is projected to surge 97% year over year to $28.6 billion for its fiscal quarter ending later this month. But a major return on that investment for Nvidia’s largest customers still seems in a galaxy far, far away. Only Microsoft has made limited disclosures about how generative AI
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