Nvidia (NVDA) Stock: Microsoft and Meta AI Spending Boosts Chip Maker

TLDR

Nvidia stock jumped 4.2% in premarket trading following Microsoft and Meta’s earnings reports Microsoft reported Q3 capital expenditures of $16.7 billion, up from $11 billion a year ago Meta increased its annual capex forecast to $64-72 billion, up from $60-65 billion Both tech giants signaled continued heavy spending on AI infrastructure Nvidia reports earnings on May 28 with analysts maintaining strong buy ratings

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Microsoft and Meta Platforms have signaled their commitment to continued heavy spending on artificial intelligence infrastructure, sending Nvidia’s stock upward as investors see positive signs for the chip maker’s future revenue.

Nvidia shares rose 4.2% to $113.52 in premarket trading Thursday after falling 0.1% in Wednesday’s session.

NVIDIA Corporation (NVDA)

The stock movement followed earnings reports from two of Nvidia’s major customers that highlighted ongoing investment in AI technology.

Microsoft reported late Wednesday that its third-quarter capital expenditures reached $16.7 billion. This represents a substantial increase from $11 billion in the same period last year.

The company maintained its full-year capex expectations, showing no signs of slowing down its AI investments.

Microsoft CEO Satya Nadella emphasized the company’s focus during an earnings call. “We continue to expand our data center capacity,” he said.

Nadella explained their approach to efficiency: “We continue to optimize and drive efficiencies across every layer, from DC [data-center] design to hardware and silicon to system software to model optimization, all towards lowering costs and increasing performance.”

Tech Giants Double Down on AI

While Microsoft executives indicated that capex will rise again next fiscal year, they noted it would be at a slower rate than the current fiscal year’s expected 57% jump.

Meta is keeping pace with its own aggressive spending plans. The company boosted its annual capex range to $64-72 billion, up from its previous forecast of $60-65 billion.

Meta Chief Financial Officer Susan Li highlighted the strong internal demand for computing resources. “Even with the capacity that we’re bringing online in 2025, we are having a hard time meeting the demand that teams have for compute resources across the company,” Li told analysts.

These reports help ease concerns that major cloud-computing companies might be pulling back on data-center spending.

Industry watchers had noted some reports suggesting Amazon’s AWS cloud business and Microsoft had pulled back on data-center leases.

Melius Research analyst Ben Reitzes wrote in a research note: “The spending plans for these 2 hyperscalers spell relief for buy-rated customers we cover like Nvidia.”

The positive outlook extended to other chip makers. Advanced Micro Devices was up 2.7% and Broadcom gained 2.9% in premarket trading.

Earnings Anticipation Builds

CoreWeave, which generates all its revenue from cloud rentals of AI servers using Nvidia chips, saw an even larger jump of 9.4%.

Nvidia’s upcoming earnings report on May 28 is highly anticipated by investors and analysts alike.

Wall Street remains bullish on Nvidia’s prospects. According to market data, 35 of 41 analysts rate NVDA a “Buy,” with an average 12-month price target of $165.22.

This target suggests a potential 51.7% upside from Wednesday’s close at $108.92. The highest target sits at $200, while the lowest is $100.

The strong analyst support comes even after Nvidia has reached a $2.6 trillion valuation, showing confidence in the company’s position in the AI market.

Nvidia’s H100 chips remain the preferred choice for training artificial-intelligence models. They serve as the backbone of infrastructure for companies like Microsoft and Meta.

The tech giants’ increased spending on AI infrastructure directly benefits Nvidia, as their demand for high-performance chips continues to grow.

Meta specifically mentioned ramping up GPU capacity in its earnings call, identifying infrastructure as a “multi-year investment priority.”

Microsoft’s $80 billion fiscal year spending on data centers supports its Copilot, OpenAI, and next-generation AI services, with Nvidia chips playing a crucial role.

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