Nvidia Stock Surges 5.1% as Alphabet Boosts AI Infrastructure Spending

Nvidia Corporation (NVDA) shares rose by 5.15% on Wednesday, reaching $124.76, following Alphabet Inc.'s (GOOGL) strong capital expenditure guidance. Alphabet announced plans to spend $75 billion on capital expenditures in 2025, significantly above the expected $58 billion, bolstering confidence in AI-related chipmakers like Nvidia.



Alphabet's fourth-quarter results, released Tuesday after market close, showed plans to spend $75 billion on capital expenditures in 2025, significantly above the expected $58 billion. This bolstered confidence in AI-related chipmakers, including Nvidia, as Alphabet remains a key buyer of AI hardware. Broadcom Inc. (AVGO) shares also gained on the news, as the company supplies AI accelerators to Alphabet.



Nvidia's data center segment has been a significant driver of growth, and Alphabet's increased spending on AI infrastructure will further boost this segment. In the fiscal second quarter of 2024, Nvidia reported record quarterly data center revenue of $26.3 billion, up 16% from the previous quarter and 154% from the previous year.

While Nvidia's stock has seen impressive growth, investors should remain cautious. Even after reporting impressive growth numbers, Nvidia stock was down as much as 5% after its 2024 second-quarter earnings report. On Nov. 7, 2024, Nvidia stock reached an all-time high of $148 due to the high demand for its GPUs needed for AI work. However, the stock has since dipped below this level, highlighting the volatility in the tech sector.

In conclusion, Alphabet's increased AI infrastructure spending has positively impacted Nvidia's stock price, with shares rising by 5.15% on Wednesday. However, investors should remain cautious and monitor the tech sector's volatility, as well as Nvidia's earnings reports and market performance.