Tio AI-vinnare på börsen när Alphabet investerar stort

Alphabet shareholders aren’t happy about the company’s plans for enormous investments this year, but a host of other businesses will directly benefit.

After the close of trading on Tuesday, Alphabet reported mixed financial results and said that its capital expenditures will total $75 billion this year. That is more than $15 billion above what analysts had forecast and is almost 45% higher than last year’s capex. Combined capital spending for Alphabet, Meta Platforms, Amazon.com and Microsoft is expected to reach hundreds of billions of dollars this year, for double-digit percentage growth.

For these companies, and certainly Alphabet, this will weigh on free cash flow and earnings. Alphabet’s depreciation expense will rise significantly this year, and as far as the market is concerned, the company had better maintain its competitiveness with its artificial intelligence offerings for both its search and cloud businesses, so that it can earn a high rate of return on the investments.

Although the stock was in the red as investors reduced their expectations for this year’s earnings, the positive is that management’s willingness to invest aggressively indicates that the Chinese app DeepSeek hasn’t posed a major threat to demand for Alphabet’s AI offerings.

The news is clearly a relief for all of the companies that produce hardware to power AI. The faster capex increases, the higher the growth of demand for semiconductors, data centers, and all the products that go into building them.

Those stocks have taken a hit recently— Nvidia stock is still 19% below the record closing level it hit in January—because the market is concerned that DeepSeek’s lower-cost and cheaper AI offering will ultimately force companies such as Alphabet and Microsoft to scale back their investment plans. That would mean less hardware demand than the market is counting on now.

But the capex guidance from Alphabet and other U.S. technology services companies this earnings season proves that growth remains steep for of all things data center.

Eventually, data-center spending will slow down, but for the moment, it is obvious that DeepSeek isn’t at a large enough scale to disrupt U.S. companies’ investments. That will give them time to fine-tune their AI offerings and make them more competitive.

For now, high growth in spending on data centers lives on. That is why most stocks that stand to gain as companies build more computing capacity were rallying Wednesday. Nvidia was off of its recent low, up 3%.

Chip maker Broadcom, which got more than a fifth of its $53.2 billion of 2024 sales from AI chips, boasted a jump of more than 200% in sales of those semiconductors last year. Continued explosive AI growth will go a long way in pumping profits far higher, so the stock was up just over 6% Wednesday. 

Micron Technology stock rose 2% Wednesday, outpacing the iShares Semiconductor exchange-traded fund’s just under 2% gain. Micron, which is ramping up sales of high bandwidth memory that attaches to Nvidia’s AI chips, still gets only a small chunk of its total revenue from AI. That has limited its gains relative to other AI names. 

Arm Holdings stock was up more than 6%. Analysts expect sales to continue to grow for the coming years, as Arm sells CPU products into Nvidia’s chips and licenses its chip designs to semiconductor companies and smartphone makers.

Stock in Amphenol, which is ramping up sales of connectors that go into Nvidia chips, rose initially, before dipping into the red. It remained above a one-month low reached when concernS about DeepSeek hammered the stock market last week.

Analysts expect sales of connectors for Nvidia chips will account for just over $1 billion of its $18.3 billion in total sales this year, according to FactSet. The vast majority of Amphenol’s business is still tied to areas such as automobiles, so the stock slipped along with shares of hundreds of other U.S. companies.

The key to remember is that Alphabet’s capex guidance is a positive for Amphenol’s earnings.

Stock in Vertiv Holdings, a manufacturer of cooling equipment that gets the majority of its sales from data centers, was up almost 6%. Shares of Eaton, a rival that is less dependent on data-center sales, rose initially, but then dipped into the red. Stock in Schneider Electric, a third maker of cooling equipment, was also in the red, but above its one-month low.

Corning and nVent, both of which see a slice of revenue from AI, were both up around 2%.

However these stocks trade in the short term, expect them to ride a tailwind of AI-related demand.