Commitments to spending on the data center continue to increase. This is good news for any business linked to the Bonanza of Artificial Intelligence (AI).
Microsoft CEO Satya Nadella has just reaffirmed its plan to spend $ 80 billion in AI data centers in 2025, mainly in relation to its OPENAI and Cloud Computing partnership division. For reference, the company had around $ 50 billion total Capital expenditure (CAPEX) in 2024.
This is a huge step in expenses. And it’s not just Microsoft; Other companies also provide for a capex Epulse in 2025.
Who will benefit from these expenses? You guessed it: Nvidia (Nvda 2.08%)). The chip champion AI matured to increase the offer to meet all these customer needs, and the company should see income jumping again in 2025. But it will not be the only company encouraging these expenditure commitments Big Tech.
Here is what the promise of $ 80 billion in Microsoft for Nvidia and other AI actions in 2025 and beyond.
Data center expenses jump in 2025
Investing in AI is with uncertainty. If someone tells you what this fast growing sector will look like in 2030, it is too confident. However, something we know with certainty: spending on AI data centers are developing aggressively in 2025.
Microsoft spends $ 80 billion. Meta-platforms plans to spend $ 60 billion at $ 65 billion, which would be close to double its figure of 2024.
We do not have the plans of Amazon Or Alphabet However, but I would expect similar jumps because they hope to stay competitive in the AI race.
Do not forget Openai or Project Stargate either. The new initiative is expected to invest $ 500 billion in data centers in the United States during a multi-year period, a random figure, no matter how you cut it. Flexible bank plans to invest more than $ 25 billion in Openai to maintain the party.
Add it completely, and we could see hundreds of billions of data centers from data centers from the largest technological companies in 2025. It is a fantastic new for their suppliers such as NVIDIA.
All roads lead to more computer fleas and nvidia
The majority of expenses on these new AI data centers will go to computer flea, which are used to execute intensive IT in AI software tools that see rapid adoption of customers. Microsoft said its IA revenues are already at an annualized rate of $ 13 billion in just a few years and developed rapidly.
NVIDIA is the dominant supplier of computer chips for these data centers at the moment. Therefore, when expenditure in the data center increases, its income should increase.
This is why its sales have increased by almost 1,000% in the past five years, reaching $ 113 billion in the past 12 months. With this jump in Capex Planning and the release of Blackwell Chip from Nvidia, the company’s revenues should still go out in 2025.
Investors are optimistic about Nvidia. It is now one of the largest companies in the world with a market capitalization of 3 dollars. It is negotiated with a price / benefit ratio (p / e) of 48 S&P 500 The average of the index of 30. This does not mean that the stock will hurt, but investors have put high expectations on its future growth.
NVDA PE ratio; data by Ycharts.
A title AI could be a better purchase than nvidia
Nvidia is clearly a good company, and its customers plan to spend a cargo on its products in 2025. However, I think there is a more sustainable AI semiconductor stock which is cheaper to buy at the moment .
It is Manufacture of Taiwan semiconductors (TSM 2.06%))or TSMC for short. The leader in the manufacture of computer flea is the company that really builds NVIDIA products (NVIDIA designs them). It also works with other companies such as AppleAnother high -level customer.
There are two reasons to love TSMC on NVIDIA as a long -term bet on IA’s actions. First, it will benefit even if competition for Nvidia increases. Its customers like Alphabet and Amazon invest strongly to integrate vertically and create their own IA computer chips.
This could harm Nvidia’s business in the long term, but will have no effect on TSMC because it is the only one who can build these chips, whether for Nvidia or Amazon. This makes TSMC a long -term gamble for the long term.
Second, TSMC is negotiated with a cheaper assessment than Nvidia with a P / E less than 30. Again, this means that TSMC has lower expectations on the part of investors for future growth.
Add it completely and I think TSMC is an excellent purchase for investors who seek to play the theme of the AI. Expenditure on data centers should explode in 2025, and a large part of this money will finally return to TSMC.
Randi Zuckerberg, former Director of Development of the Facebook and Sister of the CEO of Meta Platforms, Mark Zuckerberg, is a member of the board of directors of Motley Fool’s. John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of the board of directors of Motley Fool’s. Suzanne Frey, director of Alphabet, is a member of the board of directors of Motley Fool’s. Brett Schafer To positions in Alphabet and Amazon. The Motley Fool has positions and recommends the alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: Long January 2026 Calls $ 395 on Microsoft and Court January 2026 405 $ calls Microsoft. The Word’s madman has a Disclosure policy.