All articles tagged with #capex
Moody's warns that roughly $662 billion in planned data-center expansion is highly concentrated among five firms, creating material concentration risk for lenders and investors if demand weakens, financing tightens, or supply chains falter; the piece emphasizes potential impacts on project financing, asset valuations, and the broader tech infrastructure buildup.
An investor known as Nova Capital says Nvidia (NVDA) could move higher after its upcoming earnings as AI-related capex by hyperscalers stays robust; Nvidia has lagged the market, but a strong quarter and continued AI spending could spark a new rally, with a 12–24 month upside around 65%. Wall Street remains bullish, with a strong buy consensus and meaningful upside from current levels ahead of Nvidia’s Feb. 25 earnings report.
Despite Amazon’s $200 billion capex pledge for 2026 and a small earnings miss, top analyst Daniel Sparks says the market overreacted and presents a buying opportunity for long-term holders. He notes Amazon is monetizing capacity as it installs it, points to a fast-growing $10 billion chips business, and cites strong top- and bottom-line growth with guided 11–15% revenue growth for Q1 2026. With a Strong Buy consensus and a roughly 34% upside to a $281.68 12-month target, Sparks argues the capex cycle could pay off megacap investors over time.
Big Tech trimmed about $1.35 trillion from market value in a week as fears about AI-related capital expenditure persist, with Amazon down sharply while Alphabet slipped and Apple rose on strong iPhone demand. Investors weigh whether giant AI investments by hyperscalers will pay off, signaling ongoing volatility around Nvidia, Microsoft, Oracle, Meta, Alphabet and other tech giants.
Alphabet beat Q4 estimates but warned that 2026 capex will surge to $175-185 billion to fuel AI, effectively backing the AI infrastructure boom that benefits Nvidia’s data-center GPUs; its partnership with Nvidia includes early access to the Vera Rubin platform, underscoring how hyperscalers’ AI spending sustains demand for Nvidia hardware even as stock rallies wobble. Meta’s similar capex trend also reflects the broader AI investment cycle driving Nvidia’s growth prospects.
Amazon beat Q4 revenue estimates with $213.39 billion in sales but guided 2026 capital expenditures at about $200 billion, far above consensus and triggering a roughly 9% drop in the stock. AWS growth remained robust at 24%, with advertising and stores expanding, while Q1 2026 revenue guidance was $173.5–$178.5 billion, underscoring a near-term cost burden from aggressive AI/cloud investments.
Tesla plans roughly $20 billion in capital expenditure this year to transform its business, including converting a former Model S/X factory to build Optimus humanoid robots and reviving rooftop solar via a Buffalo, NY facility. The move spurred a rally in TSLA shares (about 5%), while Canaccord Genuity issued a Buy rating; Wall Street’s consensus remains a Hold with a price target around $401.27, implying about 8% downside risk.
Meta raises its 2026 capital expenditure forecast by 73% to $115-135 billion to fund a broad AI infrastructure push toward 'superintelligence,' with the vast majority financed by its advertising business; the company also forecast higher 2026 expenses ($162-169B) driven by AI talent and compute needs, after Q4 ad revenue rose 24% to $58.14B and shares jumped in after-hours trading.
TSMC delivered strong Q4 results with revenue of $33.7B (up ~26% y/y), gross margin 62.3% and operating margin 54%, as AI-data-center demand remains insatiable. The company raised its 2026 capex guidance to $52–$56B to meet rising capacity, and projects roughly 30% full-year revenue growth with robust margins (Q1 gross 63–65%, operating 54–56%). 7nm and smaller nodes accounted for 77% of revenue in Q4, while 3nm contributions rose to 28%. With a forward P/E under 21x and PEG around 0.7, the stock—up about 70% in the past year—is portrayed as undervalued by the article, which argues it could be a buy as AI infrastructure demand persists, though U.S. fabs may exert some margin pressure.
TSMC’s CFO says the Arizona expansion will continue and capex will rise in the coming year after the company already committed about $165 billion in U.S. investments, as it builds a gigafab cluster and adds plants to satisfy AI chip demand. The company’s first Arizona fab is now in mass production, with a second plant planned for H2 2027 and permits pursued for more sites. A new U.S.–Taiwan trade deal caps tariffs at 15% and backs up to $250 billion in direct investments and guarantees, but TSMC says its expansion is driven by customer demand rather than the talks.
The credit market is turning cautious as rising capital expenditures and declining free cash flow, especially for Oracle, Meta, and Amazon, lead to wider credit default swaps spreads, indicating increased risk and potential impacts on equity markets if AI-driven investments do not soon improve cash flows.
Big Tech stocks, especially the Magnificent 7, are heavily investing in AI, with demand outstripping supply and projected AI capital expenditure reaching 94% of operating cash flow by 2026. While companies like Meta, Google, Microsoft, and Apple are expanding AI capabilities, Meta faces scrutiny for its high spending relative to revenue, highlighting the risks of overinvestment and potential debt reliance if demand doesn't meet expectations.
Intel's stock rose after reporting better-than-expected revenue of $12.9 billion for Q2, despite a loss of 10 cents per share, and provided optimistic guidance for the current quarter. The company has completed most of its layoffs, reducing its workforce by about 15%, and CFO David Zinsner expects capital expenditure to decrease next year from the previously forecasted $18 billion. The positive results were partly due to lower tariffs and a favorable economic environment, with Intel's stock up 13% this year.
Micron is expected to report strong Q1 earnings for Fiscal 2025, driven by robust demand for its memory solutions, particularly from AI applications. Despite impressive growth in Fiscal 2024, including a 61.5% revenue increase, the stock has underperformed due to concerns over its high capital expenditures and debt levels. Investors are keenly watching Micron's guidance and CapEx plans, as these will significantly influence market reactions. Analysts remain optimistic, rating the stock a strong buy, with expectations of substantial upside potential.