Four tech giants will spend a combined $300 billion on artificial intelligence (AI) by 2025, according to a Wall Street firm. This stock could be the biggest winner.
Artificial intelligence (AI) is the most revolutionary technology in a generation. The ability to instantly generate text, images, videos and even computer code could create a huge increase in productivity for businesses around the world.
The industry is still in its infancy, but Wall Street forecasts suggest that AI could add anywhere from $7 trillion to $200 trillion to the global economy over the next decade. That’s why tech giants are competing for AI supremacy and spending astronomical amounts on data center infrastructure and chips.
This is evident from an estimate by the investment bank Morgan Stanleyfour technology giants can invest a combined $300 billion in capital expenditure (capex) by 2025 alone. The driving force behind this spending will be AI, and with Nvidia(NASDAQ: NVDA) The company provides the industry’s most advanced chips for AI development and could also be the biggest winner from the spending boom.
To make AI software “smarter,” developers need to train more advanced large language models (LLMs). That requires more data and also more processing power, which is the expensive part.
Aside from high-paying AI startups like OpenAI and Anthropic, most companies can’t afford to build their own data centers. Instead, they rent computing capacity from technology giants that build centralized infrastructure.
Based on public documents, here’s how much some of these tech giants are spending on capital investments, including AI infrastructure:
Microsoft(NASDAQ: MSFT) spent $20 billion on capital expenditures in the first quarter of 2025 (ending September 30) alone, which followed $55.7 billion in expenditures in fiscal year 2024.
Amazon(NASDAQ: AMZN) told investors it is on track to spend $75 billion in calendar year 2024 to support its AI efforts.
Alphabet(NASDAQ: GOOG)(NASDAQ: GOOGL) will spend more than $50 billion in investments by the time 2024 is officially over.
Metaplatforms(NASDAQ: META) recently told investors it is on track to spend up to $40 billion on capital expenditures this year.
Oracle(NYSE: ORCL) plans to spend $13.8 billion on capital expenditures during the 2025 fiscal year that ends in May.
Even Tesla(NASDAQ: TSLA) will spend more than $11 billion on AI infrastructure to train self-driving vehicle software by 2024.
Chips are a big part of that expenditure. By 2023, Nvidia’s H100 graphics processing units (GPUs) were the top choice for AI development, giving the company a 98% market share. They remain a popular seller today, but Nvidia has just started shipping its new Blackwell GPUs, which offer a significant performance boost.
Image source: Getty Images.
Morgan Stanley expects four tech giants to spend a combined $300 billion in capital investments by 2025. Based on his prediction:
Amazon could spend $96.4 billion
Microsoft could spend $89.9 billion
Alphabet could spend $62.6 billion
Metaplatforms could spend $52.3 billion
These numbers represent material growth relative to what these companies plan to spend in 2024. It’s impossible to know how much of that money will go toward chips specifically. But Morgan Stanley published a forecast in October suggesting that Nvidia could ship up to 800,000 units of its Blackwell-based GB200 GPU in the first three months of 2025 alone.
Price estimates range between $60,000 and $100,000 per GB200 GPU (according to Forbes), so these sales could translate into revenues of $64 billion in the first quarter of 2025 (based on an average price of $80,000 per GPU).
Considering Nvidia generated $35 billion in total revenue in its most recent quarter, this implies significant growth could be in store.
Reports indicate that Microsoft is already the largest buyer of GB200 GPUs, and Nvidia says Oracle plans to build a cluster with more than 131,000 of them. The GB200 NVL72 system can perform AI inference at 30 times the speed of the equivalent H100 system, so it’s no surprise there’s a line of buyers stretching around the block.
Now let’s talk about what all that spending could mean for Nvidia stock, because despite its 700% gain over the past two years, it could actually still be cheap.
Nvidia is on track to generate $129 billion in revenue during its 2025 fiscal year (which ends in January), but is also highly profitable. The company has delivered earnings per share (EPS) of $2.54 over the last four quarters, giving it a price-to-earnings (P/E) ratio of 53.5 at the time of writing. That is lower than the ten-year average of 58.8:
Data per YCharts.
However, the picture becomes even better when you look into the future. Based on Wall Street’s consensus forecast for Nvidia’s fiscal year 2026 (which starts in February 2025), the company could generate $4.43 in earnings per share on revenue of $195 billion.
That means Nvidia stock is trading at a price-to-earnings ratio of just 30.6. In other words, the stock would need to rise more than 90% in the coming year to trade in line with the 10-year average price/earnings ratio of 58.8.
And there could be even more upside potential, based on the fact that Nvidia has consistently exceeded Wall Street expectations.
Consider the following before buying shares in Nvidia:
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, a director at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, is a member of The Motley Fool’s board of directors. Anthony Di Pizio has no positions in the stocks mentioned. The Motley Fool holds positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, Oracle and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has a disclosure policy.
Four tech giants will spend a combined $300 billion on artificial intelligence (AI) by 2025, according to a Wall Street firm. This stock could be the biggest winner. was originally published by The Motley Fool
