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Big Tech companies are gearing up for an artificial intelligence (AI) arms race, and the price tag is staggering. In 2025, companies like Alphabet (GOOGL), Meta Platforms (META), Amazon (AMZN), and Microsoft (MSFT) are set to pour a staggering $320 billion into AI and data centers, up from $230 billion in 2024.
Alphabet’s $75 billion capex commitment for the year, announced last week, signals that the AI push is far from slowing down. This heavy spending weighed on investor sentiment, especially after the market was rattled by the rise of Chinese AI startup DeepSeek. Alphabet’s aggressive capex could pressure margins and delay near-term profitability. Still, it is a major win for chip makers.
As Alphabet’s investment boosts chip stocks, Santa Clara-based Nvidia (NVDA) stands to benefit the most, with its Blackwell processors powering the infrastructure behind this AI boom. Despite short-term jitters due to DeepSeek, Nvidia’s dominance in AI chips solidifies its position as the go-to choice for 2025 and beyond, continuing to drive the booming AI infrastructure market.
About Nvidia Stock
Nvidia (NVDA) began with gaming chips but saw a bigger game to play. Now worth $3.2 trillion by market cap, it is the AI era’s backbone, fueling ChatGPT, self-driving cars, and more.
Nvidia’s stock took a hit in early 2025, plunging 17% on Jan. 27 after DeepSeek’s AI breakthrough rattled investors. Now down over 15% from its January peak, concerns over competition linger, and NVDA remains in the red for the year.
However, looking at the bigger picture, NVDA stock is still up 86% over the past year. With Big Tech doubling down on AI infrastructure, the stock returned 15% in the last five trading sessions.
Nvidia has never been a bargain, trading at 32.66 times forward earnings, but its premium valuation is earned. With shares down double digits from their peak, this rare dip offers long-term investors a chance to buy into the future of computing.
Nvidia Tops Q3 Projections
Nvidia’s Q3 earnings on Nov. 20 blew past expectations, proving once again why it dominates AI computing. Its revenue soared 94% year over year to $35.1 billion, driven by a 112% surge in data center revenue to $30.8 billion. Gross margins stood at 74.8%.
Non-GAAP earnings doubled to $0.81 per share, marking the sixth straight quarter of triple-digit profit growth. Gaming revenue climbed 15% year-over-year to $3.3 billion, fueled by GeForce RTX GPU demand, while automotive revenue shot up 72%, as Nvidia’s Orin platform gained traction in next-gen vehicles.
Nvidia is all set to report its Q4 earnings on Wednesday, Feb. 26, after the market close. Management forecasts $37.5 billion in revenue, but Wall Street expects even more at $38.13 billion, with EPS projected to soar 61.2% to $0.79. Strong Hopper chip demand and Blackwell’s ramp-up will likely drive growth.
For fiscal 2025, analysts anticipate profit to jump 134.8% to $2.77 per share, with another 43.7% surge to $3.98 per share in fiscal 2026.
Google’s AI Bill Could Benefit Nvidia
Alphabet’s Q4 earnings on Feb. 4 should have been a victory lap but sent its stock tumbling 8%. Despite strong revenue and profit growth, Google Cloud’s revenue growth was not enough to impress Wall Street, and Alphabet’s capex forecast of up to $18 billion for Q1 - part of a massive $75 billion AI investment for 2025 - sent investors running. The annual capex was $15 billion more than Wall Street expected, leaving analysts questioning whether Google can justify the spending. Meanwhile, DeepSeek’s low-cost AI breakthrough only fueled fears of more efficient, less GPU-hungry models.
But for Nvidia, Google’s AI arms race is a jackpot. Google Cloud is facing supply constraints, and to scale up, it still relies on Nvidia’s AI powerhouse GPUs - despite its own custom chips. CEO Sundar Pichai reaffirmed Google’s “strong relationship with Nvidia,” and the company was the first to adopt Nvidia’s next-gen Blackwell platform.
AI spending is not slowing down. Hyperscalers are in a race to dominate, and Nvidia remains at the center. The GPU giant still commands 90% of the AI chip market, with its CUDA software creating an impenetrable moat. Competitors like Advanced Micro Devices (AMD) are still catching up, while Broadcom (AVGO) and Marvell Technology (MRVL) custom AI chips remain niche solutions.
Of course, risks loom. DeepSeek’s disruption rattled AI stocks, proving that innovation moves fast and giants can stumble. But when it comes to mass deployment, Nvidia remains the fastest, most efficient choice for scaling AI infrastructure. Alphabet may have taken a hit, but Nvidia is still in the driver’s seat. As Big Tech pours billions into AI infrastructure, the king of GPUs is thriving. In this AI gold rush, Nvidia is still selling the best.
Wall Street’s Bullish Bet on NVDA
Despite recent bumps, Nvidia remains a top pick for Mahoney Asset Management. CEO Ken Mahoney notes that Nvidia’s AI-driven momentum remains strong even amid DeepSeek’s disruption.
Meanwhile, Morgan Stanley sees Nvidia as a long-term AI powerhouse. Analyst Joseph Moore reaffirmed an “Overweight” rating with a $152 target, eyeing 17.1% upside.
Despite DeepSeek’s shake-up, Moore calls this a “buying opportunity,” citing strong demand for Hopper and Blackwell chips. With cloud giants expanding and AI infrastructure spending soaring, Nvidia’s dominance remains unshaken.
Overall, analysts are highly bullish on NVDA, with a solid “Strong Buy” consensus rating. Out of the 43 analysts in coverage, 37 recommend a “Strong Buy,” two advise a “Moderate Buy,” and four analysts maintain a “Hold” rating.
The mean price target of $178.09 suggests that the AI chip stock could rally as much as 37.2% from current price levels. Meanwhile, the Street-high of $220 – set by Tigress Financial - implies 69.4% upside.
Nvidia stands at the heart of AI’s gold rush, with tech giants doubling down on infrastructure. Alphabet’s massive $75 billion in planned spending is a clear signal: AI spending is not slowing, and Nvidia’s cutting-edge chips remain the backbone of this revolution. As cloud titans push forward, Nvidia’s dominance in high-performance AI hardware keeps it primed for outsize growth in 2025. With its stock still reasonably priced, given its trajectory, NVDA remains a solid option for investors.
