Nvidia shares edged higher on February 5th following Alphabet's announcement of a substantial $75 billion capital expenditure plan for 2025, aimed at expanding its AI infrastructure. This move is seen as a significant boost for chipmakers like Nvidia, as Alphabet's investment will primarily focus on technical infrastructure, including servers and data centers, which are heavily reliant on advanced chips. Alphabet's CEO, Sundar Pichai, highlighted the company's ongoing partnership with Nvidia during the earnings call, underscoring the importance of Nvidia's technology in supporting Alphabet's AI ambitions.
The announcement comes amid a competitive landscape where major tech companies, including Microsoft and Meta, are also ramping up their AI investments. Alphabet's decision to increase its capital expenditure by 42% from the previous year reflects the growing demand for AI capabilities and the need to keep pace with emerging competitors like the Chinese AI startup DeepSeek. Despite the challenges posed by DeepSeek's cost-effective AI models, Alphabet remains committed to its AI strategy, which bodes well for Nvidia as a key supplier of AI chips.
Nvidia's stock is trading at $118.98, up slightly from its previous close of $118.65 on February 4th.