Amazon plans $625 billion AI while Google Cloud income surges

Key Takeaways

• Amazon, Meta Platforms, Alphabet, and Microsoft plan to spend over $625 billion on AI infrastructure this year.
• Alphabet's Google Cloud operating income surged 154% to $5.3 billion, with revenue up 48%.
• Alphabet intends to double its capital spending in 2026 to enhance AI infrastructure.
• Nebius Group, a Dutch AI data center company using Nvidia GPUs, is predicted to be a top AI stock for 2026, expanding power capacity to 2.5 gigawatts.
• Micron is reorienting its business towards AI infrastructure, reporting 57% revenue growth in Q1 2026.
• Broadcom, a designer of custom AI chips (ASICs), partners with Alphabet for TPUs and saw AI semiconductor revenue rise 74%.
• Lattice Semiconductor's stock reached an all-time high due to an 85% increase in demand for its "companion chips" from data centers.
• ServiceNow aims to become a $1 trillion company, with its Now Assist AI suite achieving $600 million in annual contract value.
• Major investors, including university endowments and charities, increased their AI stock holdings by 20% in value in 2023.
• Despite Nvidia's leadership, companies like Alphabet, Micron, and Nebius Group are showing strong potential for higher investor returns in the AI sector.

Alphabet and Micron May Outperform Nvidia in AI

Nvidia is a top AI chipmaker, but investors might find better returns with Alphabet and Micron. Alphabet uses AI to improve its Google Services, Google Cloud, and self-driving Waymo vehicles. Google Cloud revenue now makes up over 10% of Alphabet's business. Micron, a leader in memory storage, saw its stock quadruple last year and revenue grow 57% in Q1 2026. The company is shifting its focus from consumer products to AI infrastructure, which is boosting its growth.

Alphabet and Micron Offer Strong AI Stock Returns

Nvidia leads the AI chip market, but Alphabet and Micron could offer investors higher returns. Alphabet uses AI to enhance Google Search, subscriptions, YouTube, and its Google Cloud platform. Its self-driving car fleet, Waymo, also shows great potential. Micron, a top memory storage company, saw its revenue grow 57% in its 2026 fiscal first quarter. Micron is shifting its business to focus on AI infrastructure, which is driving significant financial gains.

Google Cloud Transforms AI Demand Into Big Profits

Alphabet's Google Cloud platform is successfully turning high demand for AI tools into significant profits. In the most recent quarter, Google Cloud's revenue increased by 48% year over year, and its operating income jumped 154% to $5.3 billion. This growth is a major boost for Alphabet, even though digital advertising still makes up most of its revenue. Alphabet plans to double its capital spending in 2026 to invest more in AI infrastructure, which could impact its stock price short-term.

Nebius Group Predicted as Top AI Stock for 2026

Four major AI companies, Amazon, Meta Platforms, Alphabet, and Microsoft, plan to spend over $625 billion on AI infrastructure this year. Despite this massive spending, Nebius Group, a Dutch company building AI data centers, is predicted to be the biggest AI stock winner of 2026. Nebius uses Nvidia GPUs in its full-stack AI cloud platform and sold out its capacity in Q3 2025. The company is rapidly expanding its power capacity from 220 megawatts at the end of 2025 to a planned 2.5 gigawatts by the end of 2026. Nebius Group, with a $21 billion market cap, saw a 202% gain in 2025, outperforming Nvidia's 38% gain.

Nebius Group Poised to Lead AI Stock Gains in 2026

Major companies like Amazon, Meta Platforms, Alphabet, and Microsoft plan to invest over $625 billion in AI infrastructure this year. However, Nebius Group, a Dutch company that builds AI data centers, is predicted to be the top-performing AI stock in 2026. Nebius operates a full-stack AI cloud platform powered by Nvidia GPUs and sold out its capacity in Q3 2025. The company is aggressively expanding its data center power from 220 megawatts at the end of 2025 to a projected 2.5 gigawatts by the end of 2026. Nebius Group, with a $23 billion market cap, saw a 202% stock gain in 2025, significantly outperforming Nvidia.

Analysts Watch Super Micro After Strong Q2 Earnings

Super Micro Computer, Inc. (SMCI) is an AI stock that analysts are closely watching. Rosenblatt analyst Kevin Cassidy reaffirmed a Buy rating on SMCI with a $50.00 price target on February 4. This positive outlook follows the company's excellent fiscal Q2 2026 results. SMCI reported strong earnings and revenue, exceeding expectations for the quarter.

Study Reveals Big Investors Boosted AI Stock Holdings

A new study by investment-management software firm Clearwater Analytics shows that major investors increased their focus on AI stocks. In 2023, university endowments, charities, and wealthy individuals grew their investments in artificial intelligence. The number of clients holding AI-related stocks rose by 12%, and the total value of these holdings increased by 20%. This trend suggests strong confidence among sophisticated investors in the future potential of AI technology.

Broadcom AI Stock Earns Overwhelming Buy Ratings

Broadcom, a leading designer of custom AI chips called ASICs, receives overwhelmingly positive ratings from Wall Street analysts. The company's revenue rose 28% year over year in its most recent quarter, reaching $18.01 billion, with AI semiconductor revenue up 74%. Broadcom partners with major companies like Alphabet, helping them develop Tensor Processing Units (TPUs) since 2016. Analysts expect Broadcom's fiscal Q1 semiconductor revenue to double compared to the previous year. The consensus 12-month price target for Broadcom stock is $458, indicating strong confidence in its continued growth.

KraneShares Webinar Explores New AI Investment Cycle

KraneShares is hosting a webinar on Thursday, February 26, 2026, from 11:00 am to 12:00 pm EST, to discuss the new phase of the AI investment cycle. CIO Brendan Ahern and Senior Investment Strategist Derek Yan will cover topics such as the "SaaS-Pocalypse," humanoid robots, China's AI advancements, and data centers in space. The webinar will help investors understand how to build portfolios amid rapid technological changes and a global AI landscape. Recent market shifts, including a $300 billion loss in SaaS stocks, highlight the importance of adapting investment strategies.

JPMorgan Expert Discusses AI Selloff Trading Opportunities

An AI tool designed for tax strategies caused a selloff in wealth-management stocks, as investors worried about automated advice impacting the business. Despite this market disruption, JPMorgan Asset Management Global Market Strategist Kerry Craig sees trading opportunities. Craig believes that even with the turmoil, investors can still find good investments within the AI and tech sectors. This suggests a nuanced view on the market's reaction to AI's growing influence.

ServiceNow CEO Predicts $1 Trillion Value for AI Company

ServiceNow CEO Bill McDermott believes the company, currently valued at $111 billion, is on its way to becoming a $1 trillion company. ServiceNow has expanded its services beyond IT management to include customer service, security, and HR, serving 85% of the Fortune 500. The company rapidly integrated generative AI solutions, with its Now Assist AI suite reaching $600 million in annual contract value by the end of 2025. ServiceNow aims to be the central platform for managing AI services, expecting enterprises to spend $1.3 trillion on agentic AI applications by 2029. McDermott extended his commitment to ServiceNow until 2030 and beyond, showing strong confidence in its future.

Lattice Semiconductor Reaches High on Strong AI Demand

Lattice Semiconductor, an Oregon-based company, saw its stock price reach an all-time high of $103.56 on Wednesday morning, boosting its market value to $14 billion. This surge follows strong quarterly results and a positive outlook for 2026, driven by high demand for its "companion chips" in AI systems. While sales dropped over 30% in 2024, demand from data centers for Lattice's chips increased by 85% year over year. CEO Ford Tamer expects first-quarter sales to rise nearly 40% from last year, positioning the company for higher growth in 2026 and beyond.

Sources

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• Prediction: This Artificial Intelligence (AI) Stock Will Be the Biggest Winner of 2026
• Super Micro (SMCI) Is One of the AI Stocks Analysts Are Watching After Q2 Blowout
• Big Investors Doubled Down on AI Stocks, Study Finds
• Meet the Artificial Intelligence (AI) Stock That 98% of Wall Street Analysts Rate as a Buy
• SaaS-Pocalypse, Humanoids, China AI, and Data Centers in Space! Portfolio Construction for a New AI Investment Cycle
• Watch JPMorgan's Craig on Trading Opportunities in AI Selloff
• This AI Stock's CEO Just Said It's a $1 Trillion Company in the Making
• Oregon semiconductor company hits all-time high as AI fuels demand