Leading AI chip stocks got a lift this week from hyperscale cloud computing companies reiterating their hefty data center spending plans. The reassuring reports came after concerns last week that companies might pause their spending following news that China's DeepSeek built a low-cost AI system.
Nvidia, Broadcom and Marvell Technology moved higher on capex reports from Amazon.com, Google parent Alphabet, Facebook parent Meta Platforms and Microsoft.
Amazon said late Thursday it will spend about $100 billion on capital expenditures this year, up 29% over last year's capex.
Earlier in the week, Alphabet said it plans to spend $75 billion on capex in 2024, a 43% lift over 2024. Microsoft has said it will spend $80 billion building artificial intelligence data centers in its fiscal year ending June. And Meta said it plans to spend as much as $65 billion on capex in 2025.
DeepSeek's success with its budget AI system is not causing hyperscalers to rethink their plans to invest heavily in cutting-edge data centers for artificial intelligence.
The top dog among AI chip stocks, Nvidia, earned a supportive report from investment Morgan Stanley on Thursday. Analyst Joseph Moore reiterated his "top pick" buy rating on Nvidia stock with a price target of 152.
On the stock market today, Nvidia stock climbed 0.9% to close at 129.84.
"Capex commentary from Nvidia's largest customers reaffirmed investment trajectories, and emphasized a continued near-term supply-demand mismatch," Moore said in a client note.
The top three AI chip stocks — Nvidia, Broadcom and Marvell — are on the IBD Tech Leaders list.
Rambus Joins AI Chip Stocks
Meanwhile, semiconductor companies posting quarterly results this week saw mixed responses from investors.
AI-exposed AMD and Arm topped estimates but disappointed with their current-quarter guidance.
Chips stocks tied to cyclical industries like automotive, industrial and personal electronics were a mixed bag.
Gainers post-earnings included Cirrus Logic, InterDigital, Monolithic Power Systems, Rambus and Silicon Labs.
Decliners included Impinj, Macom Technology Solutions, Microchip Technology, Qualcomm, SiTime, Skyworks Solutions and Synaptics.
Several analysts noted that Rambus is an AI play as it is benefiting from the AI infrastructure buildout with its memory-to-processor interface chips.
More AI Stocks News And Analysis
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
