AI Stocks and Trump’s Policy Tailwinds: How Tax and R&D Incentives in the OBBBA Supercharge Growth for Nvidia and Meta

The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, has redefined the U.S. tax and R&D landscape, creating a tailwind for artificial intelligence (AI) leaders like Nvidia and Meta. By reintroducing 100% bonus depreciation for qualifying assets and allowing immediate expensing of domestic R&D costs, the legislation accelerates capital investment and innovation in AI infrastructure, positioning these companies to dominate the next phase of the AI revolution.

Tax Incentives as a Catalyst for AI Growth

The OBBBA’s 100% bonus depreciation provision enables businesses to deduct the full cost of machinery and equipment in the year of purchase, a reversal of the TCJA’s phase-down. For capital-intensive sectors like semiconductors and data centers, this means Nvidia can immediately write off investments in AI supercomputers and manufacturing facilities. The company has already expanded its U.S. footprint, adding 1 million square feet of facilities in Arizona and Texas, with projected AI infrastructure revenue reaching half a trillion dollars [2].

Similarly, Meta is leveraging these incentives to fund its $66–72 billion 2025 capital expenditure plan, including two “titan clusters” in Ohio and Louisiana. These projects, critical for AI-driven cloud computing, are supported by the OBBBA’s tax flexibility, which allows companies to redirect savings toward infrastructure [3]. Morgan Stanley analysts estimate that the OBBBA could boost free cash flows for tech giants like Meta by $49.5 billion in 2025, enabling aggressive reinvestment in AI [1].

R&D Expensing: Fueling Innovation

The OBBBA’s full expensing of domestic R&D costs—reversing the TCJA’s five-year amortization rule—has been a game-changer. Nvidia, which spent $12.9 billion on R&D in FY2025 (up from $8.7 billion in 2024), can now deduct these expenses immediately, accelerating development of cutting-edge technologies like the Blackwell GPU [4]. This aligns with Bank of America’s projection that AI accelerators will account for 65% of data center spending by 2030, with Nvidia maintaining an 80% market share [1].

Meta has similarly ramped up R&D, with expenses reaching $48.45 billion for the twelve months ending June 2025—a 20.3% year-over-year increase. The OBBBA’s tax incentives provide the financial flexibility to sustain this growth, particularly as the company scales AI infrastructure to meet rising demand [3].

Strategic Implications and Risks

While the OBBBA’s incentives are transformative, they come with challenges. The bill’s foreign supply chain restrictions, targeting “prohibited foreign entities,” force companies like Nvidia to navigate compliance hurdles, especially in China. Despite a 15% tax on AI chip exports to China, Nvidia’s CEO Jensen Huang remains optimistic, emphasizing the importance of global adoption for U.S. AI dominance [5].

For Meta, the OBBBA’s tax changes intersect with broader geopolitical strategies. CEO Mark Zuckerberg’s engagement with the Trump administration to address digital service taxes highlights the administration’s focus on protecting U.S. tech firms from foreign levies [4]. However, the OBBBA’s phaseout of clean energy tax credits raises concerns about long-term sustainability, as the AI infrastructure boom relies heavily on energy-intensive operations [2].

Conclusion

The OBBBA’s tax and R&D incentives are reshaping the AI landscape, providing Nvidia and Meta with the tools to accelerate innovation and infrastructure expansion. While challenges like supply chain restrictions and fiscal sustainability persist, the immediate financial benefits—evidenced by Morgan Stanley’s $49.5 billion free cash flow projection for 2025—underscore the bill’s potential to supercharge growth. For investors, the OBBBA represents a pivotal policy shift that aligns with the strategic priorities of AI leaders, offering a compelling case for long-term investment in the sector.

**Source:[1] Why Nvidia Could Be the Biggest Tech Winner of the 'One Big Beautiful Bill Act' [https://www.investopedia.com/why-nvidia-could-be-the-biggest-winner-of-the-one-big-beautiful-bill-11781658][2] AI and Tech under the One Big Beautiful Bill Act [https://www.ropesgray.com/en/insights/alerts/2025/07/ai-and-tech-under-the-one-big-beautiful-bill-act-key-restrictions-risks-and-opportunities][3] Meta Reports First Quarter 2025 Results [https://investor.atmeta.com/investor-news/press-release-details/2025/Meta-Reports-First-Quarter-2025-Results/default.aspx][4] Nvidia R&D expenses FY2025 [https://www.statista.com/statistics/988048/nvidia-research-and-development-expenses/][5] Nvidia CEO in talks with Trump admin about selling ... [https://www.foxbusiness.com/technology/nvidia-ceo-says-hes-talks-trump-admin-selling-blackwell-chip-china]