Alphabet’s Artificial Intelligence (AI) Spending Spree Is Great News for Nvidia
Prosper Junior Bakiny, The Motley Fool
Thu, July 9, 2026 at 2:50 AM GMT+5:30
3 min read
- GOOGL-1.39%
- NVDA+3.65%
Last month, Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) announced an $80 billion equity capital raise. The company made it clear that it was doing so to fund its aggressive spending on artificial intelligence (AI). While we can debate whether that’s good for the company — with some investors arguing that the massive spending won’t pay off and will only squeeze its profits and margins — there is one corporation for which this is a clear bullish sign: Nvidia (NASDAQ: NVDA). Read on to find out why
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
The hyperscalers keep battling it out
Alphabet’s massive $80 billion AI infrastructure build-out will flow into several areas, probably including Nvidia’s GPUs (<a href="https://www.fool.com/investing/stock-market/market-sectors/information-technology/gpu-stocks/?utm_source=yahoo-host-full&utm_medium=feed&utm_campaign=article&referring_guid=37def549-44f6-48ab-99bb-b8f3da9ff144″ rel=”nofollow noopener” target=”_blank”>Graphics Processing Units), which remain the workhorse of AI training. While it is true that Alphabet has sought to reduce its reliance on Nvidia’s hardware, notably by doubling down on internally developed custom AI chips, management has been explicit that Nvidia’s GPUs remain central to the company’s business. As Alphabet’s CEO, Sundar Pichai, said: “Nvidia GPUs are a core part of our AI accelerator portfolio.” That should remain the case for the foreseeable future. So, Alphabet’s increased AI spending is excellent news for Nvidia.
But we could go even further. The fact that Alphabet is spending even more to capitalize on growing AI-related opportunities strongly suggests that its biggest cloud competitors — Microsoft (NASDAQ: MSFT) and Amazon (NASDAQ: AMZN) — will likely do the same. Even beyond the hyperscalers, several other companies are doubling down on AI investments. That includes Tesla (NASDAQ: TSLA), whose long-term outlook is becoming increasingly tied to the technology. Tesla is also a major Nvidia customer. And for that matter, so is Space Exploration Technologies (NASDAQ: SPCX), the other public corporation headed by Elon Musk. The message that these (and other) CEOs are sending is crystal clear, and it is a bullish signal for Nvidia.
It’s a great time to buy the stock
Nvidia’s CFO, Colette Kress, said that AI infrastructure spending could reach between $3 trillion and $4 trillion by the end of the decade — according to some estimates, it was only $318 billion last year. If Kress is correct, we could be looking at an enormous remaining opportunity. Even with a more modest projection of $1 trillion by the end of the decade, Nvidia’s addressable market looks massive
