Artificial intelligence spending fears were overblown.
In fact, all we have to do is look at what Microsoft and Meta just said.
“Contrary to investors’ worries of slowing capex, it appears that spending for AI continues to be unabated,” Citi analyst Christopher Danely said, as quoted by CNBC. “AI infrastructure buildouts remain as key priorities for hyperscalers with the companies’ willingness to absorb the costs of tariffs. We view this as positive for AI-exposed stocks.”
Microsoft said its capex hit $16.75 billion in the third quarter. Moving forward, the company plans to spend $80 billion in 2025.
Meta also increased its 2025 capex to reflect an “increase in the expected cost of infrastructure hardware” from suppliers around the world. According to reports, the company increased its 2025 capital expenditures to come in the range of $64 billion to $72 billion, up from its prior outlook of $60 billion to $65 billion.
That being said, it’s time to jump back into some of the most beaten-down AI stocks, such as:
Nvidia (NVDA)
After dropping from about $150 to a low of about $90, NVDA is starting to pivot higher again. Last trading at $114.16, we’d like to see it retest $130 initially.
Helping, Microsoft CEO Satya Nadella just said on an earnings call, “We continue to expand our data center capacity…We continue to optimize and drive efficiencies across every layer, from DC [data-center] design to hardware and silicon to system software to model optimization, all towards lowering costs and increasing performance.”
All of which is a strong catalyst for Nvidia.
Even Meta CFO Susan Li said, “Even with the capacity that we’re bringing online in 2025, we are having a hard time meeting the demand that teams have for compute resources across the company.” Again, another strong catalyst.
Roundhill Generative AI & Technology ETF (CHAT)
We can also dig into ETFs such as the Roundhill Generative AI & Technology ETF for broad exposure to AI stocks. With an expense ratio of 0.75%, CHAT is the world’s first generative AI ETF, as noted by RoundhillInvestments.com.Some of its top holdings include Nvidia, Alphabet, Palantir Technologies, Microsoft, Oracle and another 31 related stocks. CHAT also trades a