After a huge run higher, Nvidia(Nasdaq: NVDA) The shares have not even kept the general market in recent months. There are several reasons for that, but the big question for investors is whether it is time to take advantage of the stagnant share price of Nvidia.
The share increased around 85%in the past year, but it is lower than four months ago, even if the S&P 500 Has a total return of around 4% at the time. But now it seems that there are more than 300 billion more reasons to buy the shares. That is because various major technology companies are planning to spend no less than $ 320 billion on data centers and artificial intelligence (AI) infrastructure in the following year.
Nvidia’s recent success is relatively easy to explain. There is a lot of demand for his advanced AI Graphics Processing Unit (GPU) chips. With the help of the guidelines of the management for the short -term fourth quarter to be reported, the turnover for the financial year must end at the end of January with a growth of approximately 110%on an annual basis. That is especially impressive, since the income of the quarter of $ 40 billion is approaching.
Nvidia also shared his plans with investors for continuous innovation that should continue to stimulate the question. The sale of its H100 and H200 GPU chips has stimulated sales growth and Nvidia now has his Blackwell AI architecture in production.
CEO Jensen Huang has called the demand for Blackwell ‘Insane’. Investors will hear an update on his Blackwell sale when Nvidia reports the profit on 26 February. The company can also discuss the Rubin AI platform of the next generation that will appear in 2026.
A recent headwind for NVIDIA shares was the surprising announcement last month of the Chinese start-up Deepseek in private property. That company reportedly established a well -performing large language model (LLM) for just $ 6 million. Although many question the authenticity of those total capital costs, the Deepseek product raised uncertainty about how many technology companies with large caps would continue to spend on Nvidia AI products.
But those companies do not nip back to expenditures. Meta platforms” Amazon” AlphabetAnd Microsoft Each announced spending plans for data centers and AI infrastructure in 2025. As a group, the investments can amount to no less than $ 320 billion in the course of just one year.
Amazon expects to lead its way with $ 100 billion in capital expenses. CEO Andy Jassy stated: “The vast majority of those Capex spending is up to AI for AWS (Amazon Web Services).” Alphabet is planning around $ 75 billion and Meta $ 65 billion. Microsoft will continue its plan for $ 80 billion in AI Investments up to and including June this year.
That company said it already sees returns on its investment. Satya Nadella, chairman and CEO of Microsoft, noted: “Al, our AI activities has surpassed an annual Omzetrun rate of $ 13 billion, an increase of 175% year after year.” NVIDIA is the clear leader in hardware for AI infrastructure and is perhaps the biggest benefactor of all those capital spending.
On top of that tail wind with regard to the expenditure for AI data center, Nvidia has other growing segments. The gaming company generates the second most income. GAME income has been accelerated in each of the last three quarters and reaches the highest level since the quarterly period of Nvidia ended on 1 May 2022.
The professional visualization company offers a platform for making industrial AI simulations and uses AI to stimulate efficiency for industrial developers. The turnover of that segment has risen in the last three -quarters and has more than doubled in the past two years. Automotive and robotics income are also accelerated, with growth in each of the last five quarter periods.
These other business segments use AI and also offer software solutions to NVIDIA’s AI hardware customers. This helps to offer a flywheel effect because the AI architecture of the next generation continues to improve and used in its various platform solutions.
The coming quarterly report could yield the volatility of the stock price, but investors must keep Nvidia for the long -term potential. A pullback that could come from the quarterly report would simply offer the opportunity to buy more Nvidia shares.
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*Stock Advisor Return on February 3, 2025
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and Sister of Meta Platforms CEO Mark Zuckerberg, is a member of the board of directors of the Motley Fool. John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of the board of directors of the Motley Fool. Suzanne Frey, a director of Alphabet, is a member of the board of directors of the Motley Fool. Howard Smith has positions in alphabet, Amazon, Microsoft and Nvidia. The Motley Fool has positions and recommends Alphabet, Amazon, Meta Platforms, Microsoft and Nvidia. The Motley Fool recommends the following options: Lang January 2026 $ 395 calls on Microsoft and short January 2026 $ 405 calls on Microsoft. The Motley Fool has a disclosure policy.
300 billion reasons to buy Nvidia shares as if there are no tomorrow, was originally published by De Motley Fool
