Big Tech's AI Buildout Could Be Worth $4 Trillion: Nvidia and Other Semiconductor Stocks to Gain Most

Big Tech's AI buildout could be worth $4 trillion, with Nvidia and its partner, Intel, set to gain the most. Nvidia serves a wide variety of AI players, including tech giants like Meta, Alphabet, and Microsoft, which are investing heavily in AI. Nvidia reported double-digit revenue growth in the latest quarter and is positioned to be the "go to" destination for companies on the AI path.

Big Tech's aggressive investment in artificial intelligence (AI) infrastructure is poised to reach an unprecedented scale, potentially reaching $4 trillion by 2030, according to Nvidia's CEO Jensen Huang [1]. This significant expenditure will primarily benefit semiconductor companies like Nvidia and its partner, Intel, which are integral to the development and deployment of AI technologies.

Nvidia (NVDA) reported a strong second quarter, with revenue of $46.7 billion, surpassing analyst expectations by $510 million [1]. The company's Blackwell Ultra chips, which cater to the latest AI processing capabilities, now account for approximately 50% of its product mix [1]. This rapid adoption indicates a high demand for advanced AI processing solutions. Major cloud providers, including Alphabet, Meta, Amazon, and Microsoft, have significantly increased their 2025 capital expenditure forecasts, with Alphabet raising its capex guidance from $75 billion to $85 billion [1]. These investments collectively represent over $350 billion in annual AI infrastructure spending, positioning Nvidia to capture a substantial portion of this market.

Intel (INTC) is another key player in the AI semiconductor market. The company has been investing heavily in AI technologies and has seen its AI-related revenue grow significantly. Intel's AI processors are designed to handle the computational demands of AI workloads, making them essential for data centers and other AI-intensive applications.

The AI buildout is expected to drive substantial growth for both Nvidia and Intel. Nvidia's stock has been supported by Wall Street analysts, with JPMorgan reaffirming its Overweight rating and raising its price target to $215 [1]. Intel, on the other hand, has been working to strengthen its position in the AI market, investing in new technologies and partnerships to enhance its capabilities.

While Nvidia and Intel are well-positioned to benefit from the AI buildout, other semiconductor companies like Broadcom (AVGO) are also seeing significant growth in their AI-related revenues. Broadcom's AI chip business has grown rapidly, with AI-related revenue climbing 46% year over year in the latest quarter [2]. However, Broadcom's stock is currently trading at a high forward P/E ratio of 45, making it more expensive compared to other semiconductor stocks.

In conclusion, the AI buildout by Big Tech companies is expected to reach $4 trillion by 2030, with Nvidia and Intel set to gain the most. Nvidia's strong performance in the latest quarter and its position as the "go to" destination for AI technologies indicate its potential to capture a significant portion of this market. Intel's investments in AI technologies and its partnership with Nvidia also position it to benefit from the AI buildout. Investors should closely monitor the progress of these companies and the broader AI market as it continues to grow.

References:
[1] https://parameter.io/nvidia-nvda-stock-jensen-huangs-4-trillion-ai-prediction-sparks-investor-interest/
[2] https://finance.yahoo.com/news/prediction-artificial-intelligence-ai-semiconductor-160500517.html