AI CapEx spending surges to 18% of sales for largest spenders, nearly doubling in 18 months.

AI CapEx spending surges to 18% of sales for largest spenders, nearly doubling in 18 months.

Artificial Intelligence (AI) capital expenditures (CapEx) spending has surged to 18% of sales for the largest spenders in the sector, nearly doubling in just 18 months. This significant increase reflects a growing trend where major tech companies are investing heavily in AI infrastructure to stay competitive and capitalize on the burgeoning AI market.

According to market researcher Dell'Oro Group, the top 10 big tech companies are projected to spend over $1 trillion on AI infrastructure by 2028, up from about $593 billion this year [1]. This substantial increase in spending is driven by the need to enhance AI capabilities and stay ahead in the rapidly evolving technology landscape.

Nvidia has been one of the primary beneficiaries of this spending spree. Its Graphics Processing Units (GPUs) play a crucial role in AI training and inference servers. The company has seen its revenue and profits climb significantly over the past three years, with a 69% year-over-year increase in revenue and 57% adjusted profit growth during its most recent quarter [1].

However, while Nvidia has been a significant winner, other semiconductor stocks are positioned to capitalize on the continued rise in AI spending. Marvell Technology, Micron Technology, and Taiwan Semiconductor Manufacturing (TSMC) are among the companies poised to benefit from this trend.

Marvell Technology, for instance, is a chipmaker behind custom AI chip designs for Amazon and Microsoft. Its XPUs are designed to optimize price performance for large language model training or inference, presenting a growing opportunity for the company [1]. Micron Technology, on the other hand, is a supplier of memory chips, particularly high-bandwidth memory (HBM) chips, which are essential for AI applications. TSMC, the world's largest chip fabricator, benefits from its leading-edge technology and the significant share of silicon manufacturing spending it commands [1].

The surge in AI CapEx spending is not just limited to tech giants. The American consumer, who represents roughly two-thirds of the country's gross domestic product, is also experiencing a significant shift in spending patterns. The summer of 2025 is expected to be a slow season for consumer spending, with interconnected factors such as recent job growth and the impact of AI on the workforce playing a role [2].

This trend underscores the importance of AI in shaping both corporate and consumer spending patterns. As AI continues to evolve, it is likely that we will see further increases in CapEx spending across various sectors, creating new opportunities for investors and financial professionals.

References:

[1] https://finance.yahoo.com/news/big-tech-track-spend-over-083500292.html
[2] https://www.aol.com/finance/spending-ai-data-centers-massive-150110377.html