Hyperscalers' Q3 Financial Results and Capex Plans

Investing.com — Hyperscalers like Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), and Meta (NASDAQ:META) reported their third-quarter financial results last week. Along with these numbers, they provided updates on their Capex spending plans amid the ongoing AI boom. The results indicate impressive growth.

Morgan Stanley internet analyst Brian Nowak highlighted that they now see 2025 capex for hyperscalers reaching over $300 billion, which represents a 25% increase from 2024 and nearly double 2023.

As a result, the analyst raised their 2025 capex estimates by 9%. The biggest spenders will include Amazon and Microsoft, projected to spend $96.4 billion and $89.9 billion, respectively.

> "In all, we now expect AMZN/GOOGL/META/MSFT to spend ~$300bn/$335b+ in '25/'26 as they continue to invest in the multi-year GenAI and LLM-enabled opportunities," Nowak commented.

These high and rising capex numbers underscore the importance of continued disclosure about new and incremental adoption, engagement, and revenue opportunities that each of these four companies are seeing and investing in.

The biggest beneficiary of this new spending trend is NVIDIA (NASDAQ:NVDA), which produces the high-end AI chips necessary for the extensive new infrastructure. BofA Securities analyst Vivek Arya expects Nvidia to capture over 75% of the AI accelerator market share through 2027. In contrast, Advanced Micro Devices Inc (NASDAQ:AMD) and Broadcom Inc (NASDAQ:AVGO) are anticipated to secure mid-single digit shares.

> "We continue to expect the AI accelerator market to grow to $280bn by CY27E (and eventually towards $400bn+) from just ~$45bn in CY23," Arya commented.