Major tech companies are significantly increasing their investments in artificial intelligence infrastructure, signaling a maturing AI market. Amazon plans to spend a substantial $200 billion on capital expenditures in 2026, primarily for AI, a move that initially caused its stock to drop over 10% due to profit forecast concerns. CEO Andy Jassy, however, sees this as an "extraordinarily unusual opportunity," expecting strong returns and highlighting Amazon's own Trainium and Graviton chips, which could generate over $10 billion this year. Amazon Web Services also reported a 24% revenue growth last quarter, and the company maintains a successful partnership with Anthropic.
Similarly, Alphabet, Google's parent company, is set to invest between $175 billion and $185 billion in capital expenditures in 2026, doubling its spending from the previous year, with a strong focus on AI. CEO Sundar Pichai defends this aggressive spending, noting that AI investments are already driving revenue and growth, exemplified by 8 million paid seats for Gemini Enterprise sold in just four months. The Gemini 3 model has also reached 750 million monthly active users, further increasing the demand for computing power. Other tech giants like Meta and Microsoft are also ramping up their AI spending, creating a ripple effect across the industry.
This massive investment benefits key suppliers and infrastructure providers. Broadcom, for instance, has been upgraded to a buy rating, positioned as a major winner from increased AI spending, supplying custom chips to companies like Alphabet and Meta. Nvidia, a leading GPU maker, is also a significant beneficiary of Alphabet's substantial AI investments. Furthermore, Brookfield Renewable is playing a crucial role by providing clean energy from hydroelectric, solar, wind, storage, and nuclear sources to power the vast AI infrastructure of companies like Microsoft and Google, with Google's deal alone covering 3 gigawatts of hydroelectric power.
The demand for high-performance memory chips essential for AI is also soaring. Micron Technology's stock has surged, nearing a $500 billion market cap, driven by high demand for its HBM and DRAM chips, with its entire 2026 supply already sold and gross margins reaching 57% in fiscal Q1. Sandisk is experiencing a similar trend, facing a huge supply shortage in NAND flash memory, which led to a 76% revenue jump last quarter. While strong demand for these chips is expected to continue, pricing power might moderate by 2028 as supply catches up.
Beyond hardware, the AI market is evolving, with companies like Alibaba Group showing strong growth in their cloud computing business, with revenue up 34% year over year. Analysts predict Alibaba's market value, currently around $400 billion, could surpass Micron's by the end of next year, driven by its cloud investments and improving "quick commerce" profitability. Meanwhile, companies like Bitfarms, now Keel Infrastructure, and IREN are pivoting from cryptocurrency mining to building data centers for high-performance computing and AI, reflecting a broader industry shift towards AI-centric operations.
Key Takeaways
- Amazon plans to invest $200 billion in capital expenditures in 2026, primarily for AI infrastructure, with CEO Andy Jassy expecting strong returns and over $10 billion from its custom AI chips.
- Alphabet (Google) is committing $175 billion to $185 billion to capital expenditures in 2026, doubling last year's spending for AI, driven by 8 million paid Gemini Enterprise seats and 750 million Gemini 3 monthly active users.
- Micron Technology's stock surged due to high demand for HBM and DRAM chips for AI, selling its entire 2026 supply and achieving 57% gross margins in fiscal Q1.
- Sandisk experienced a 76% revenue jump last quarter due to high demand and supply shortages in NAND flash memory crucial for AI infrastructure.
- Broadcom and Nvidia are major beneficiaries of the massive AI spending by tech giants like Amazon, Alphabet, Meta, and Microsoft, supplying custom chips and GPUs respectively.
- Brookfield Renewable provides clean energy solutions to AI giants like Microsoft and Alphabet's Google, including a 3-gigawatt hydroelectric deal with Google.
- Alibaba Group's cloud computing revenue grew 34% year over year, with analysts predicting its market value could surpass Micron's by the end of next year due to AI investments.
- Companies like Bitfarms (rebranding to Keel Infrastructure) and IREN are pivoting from cryptocurrency mining to developing data centers for high-performance computing and AI.
- The AI market is evolving beyond chipmakers, with Google integrating AI across its business and analysts defending AI stocks after recent sell-offs, seeing undervalued opportunities.
- Meta and Microsoft are also significantly increasing their AI spending, contributing to the industry-wide surge in AI infrastructure investment.
Alibaba Could Outperform Micron in AI Market
Micron Technology's stock has surged due to high demand for its AI chips, like HBM, which are crucial for large language models. The company has a market cap near $500 billion and has already sold its entire 2026 supply, leading to strong pricing and margins. However, this pricing power might lessen by 2028 as supply and demand balance. Meanwhile, Alibaba Group, with a market value of about $400 billion, shows strong growth in its cloud computing business. Its "quick commerce" efforts in China are also improving, with sales up 60% last quarter. Experts predict Alibaba's value could surpass Micron's by the end of next year.
Alibaba Stock May Overtake Micron by Next Year
Micron Technology stock has risen sharply, up 261% in six months, reaching a market cap near $500 billion. This growth comes from high demand for its DRAM and HBM chips, vital for AI training. Micron has already sold its entire 2026 supply, boosting its gross margin to 57% in fiscal Q1. While strong demand is expected to last beyond 2026, its pricing power may decrease as supply catches up, possibly by 2028. Alibaba Group, with a market value around $400 billion, is seeing strong growth in its cloud business. Its "quick commerce" in China is also becoming more profitable, with sales up 60% last quarter. Analysts believe Alibaba's value could exceed Micron's by the end of next year.
Alibaba Poised to Surpass Micron in AI Value
Micron Technology's stock has soared, quadrupling in six months, driven by high demand for its AI chips like HBM. The company's market cap is nearing $500 billion, and it has already contracted its entire 2026 chip supply. This strong demand has boosted its gross margin to 57% in fiscal Q1. However, Micron's pricing power may eventually decrease as industry supply increases, possibly by 2028. Meanwhile, Alibaba Group, with a market value around $400 billion, shows strong growth in its cloud computing business, with revenue up 34% year over year. Its "quick commerce" efforts in China are also becoming more profitable, and the company is investing heavily in cloud infrastructure. Analysts predict Alibaba's earnings growth could lead it to surpass Micron's value by the end of next year.
Amazon's Huge AI Investment Shocks Investors
Amazon plans to spend a massive $200 billion on capital expenditures in 2026, mostly for AI infrastructure. This amount surprised Wall Street and caused Amazon's stock to drop over 10% due to concerns about profit forecasts. CEO Andy Jassy believes these investments will bring strong returns, calling AI an "extraordinarily unusual opportunity." He noted that Amazon's own chips, Trainium and Graviton, could earn over $10 billion this year. Jassy also highlighted the company's successful partnership with Anthropic and sees future growth in AI for enterprise production.
Amazon's $200 Billion AI Plan Causes Stock Drop
Amazon announced plans to spend about $200 billion in 2026, mainly on artificial intelligence infrastructure, which caused its stock to fall over 11%. This spending is a nearly 60% increase from 2025 and will largely support Amazon Web Services and AI development. CEO Andy Jassy defended the investment, expecting strong long-term returns and pointing to AWS revenue growth of 24% last quarter. Other tech companies like Alphabet, Meta, and Microsoft are also increasing their AI spending significantly. Jassy believes the biggest and most lasting demand for AI will come from companies using it for core business tasks.
Analysts Defend AI Stocks After Recent Sell-Off
Analysts are defending certain stocks that have fallen during a recent AI-related sell-off. JPMorgan upgraded London Stock Exchange Group, which dropped 16% last month, believing investors are missing its potential in AI data and analytics. Morgan Stanley also stated that the sell-off in European software stocks is too extreme. They see many undervalued companies in the sector that are well-positioned to benefit from AI trends.
Bitfarms Becomes Keel Infrastructure Focusing on AI
Bitfarms is changing its name to Keel Infrastructure and moving its legal headquarters from Canada to the United States. The company is shifting its focus from bitcoin mining to building data centers for high-performance computing and artificial intelligence. CEO Ben Gagnon stated they are "no longer a Bitcoin company." This move aims to attract more capital and simplify its structure. Bitfarms has also started repaying a $300 million credit facility, beginning with $100 million for its Panther Creek site. The company's stock rose 18% after the announcement.
IREN Stock Drops Amid Crypto Woes AI Hopes
IREN stock saw a decline on Friday following a disappointing earnings report. Investors are concerned about the company's cryptocurrency mining operations. Despite these worries, IREN's management remains hopeful about its shift towards artificial intelligence computing. The company specializes in building and running data centers powered by renewable energy.
Broadcom Stock Upgraded Amid Huge AI Spending
CNBC Investing Club upgraded Broadcom to a buy rating, seeing it as a major winner from increased AI spending. Large tech companies like Amazon, Alphabet, Meta, and Microsoft plan to invest hundreds of billions in AI infrastructure this year. Amazon alone expects to spend $200 billion, while Alphabet plans up to $185 billion. This massive spending will benefit companies providing GPUs, electrical equipment, cooling systems, and fiber cabling for data centers. Broadcom, a key supplier of custom chips for Alphabet and Meta, is expected to beat earnings estimates due to these huge investments.
Micron and Sandisk Thrive on AI Memory Demand
Micron and Sandisk are highlighted as top artificial intelligence stocks to buy in February. Micron, a leader in DRAM, benefits greatly from the high demand for high-bandwidth memory, which is essential for AI infrastructure. This demand has caused a DRAM shortage, driving up prices and Micron's revenue and gross margin. Similarly, Sandisk, focused on NAND flash memory, is experiencing a huge supply shortage in its market due to AI infrastructure needs. Sandisk's revenue jumped 76% last quarter, with its gross margin rising significantly. Both companies are seeing strong growth as AI drives demand for memory chips.
Google Shows AI Market Is Changing Not Dying
The artificial intelligence market is changing, moving beyond just chipmakers like Nvidia. Google is a prime example of this shift, investing heavily in AI research and development. The company is integrating AI across its business, as seen with its Gemini AI model. This shows the AI market is maturing and becoming more stable, rather than fading. Investors should now look at companies like Google that are finding practical uses for AI in their products and services.
Alphabet's Huge AI Spending Boosts Nvidia
Alphabet, Google's parent company, announced plans to spend between $175 billion and $185 billion on capital expenditures in 2026, doubling its spending from last year. This massive investment, primarily for AI, is seen as a big win for Nvidia, a leading maker of GPUs for AI applications. Although investors showed some caution about Alphabet's aggressive spending, CEO Sundar Pichai defended the AI boom. He noted that AI investments are already driving revenue and growth, with 8 million paid seats for Gemini Enterprise sold in just four months. The company's Gemini 3 model also gained 750 million monthly active users, increasing the need for more computing power.
Brookfield Renewable Powers AI Giants With Clean Energy
Brookfield Renewable, a clean energy company, is playing a key role in the artificial intelligence expansion. It provides reliable power from hydroelectric, solar, wind, storage, and nuclear sources across four continents. The company has partnered with tech giants like Microsoft and Alphabet's Google to supply electricity for their massive AI infrastructure. Google's deal is for 3 gigawatts of hydroelectric power, while Microsoft's is even larger. Brookfield Renewable offers a high dividend yield, backed by long-term power contracts, and aims for 5-9% annual dividend growth.
Sources
- Prediction: This Artificial Intelligence (AI) Stock Will Be Worth More Than Micron By the End of Next Year
- Prediction: This Artificial Intelligence (AI) Stock Will Be Worth More Than Micron By the End of Next Year
- Prediction: This Artificial Intelligence (AI) Stock Will Be Worth More Than Micron By the End of Next Year
- Amazon's $200 billion AI spending plan stuns Wall Street
- Amazon’s $200B spending plan stuns Wall Street
- Analysts come to defense of hard-hit stocks from AI sell-off
- Bitfarms (BITF) says it's 'no longer a Bitcoin company' as it moves to U.S. under new name
- IREN Stutters. It's a Story of Crypto Pain and AI Gains.
- We're upgrading shares of a big beneficiary of AI spending going through the roof
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- Google shows the AI trade isn’t dying, just changing. How to play it.
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