Nvidia, Microsoft, Amazon Invest $40B in Data Centers

Major players in the tech and finance sectors are making significant investments in artificial intelligence infrastructure. Nvidia, Microsoft, and BlackRock, alongside xAI, are collectively spending $40 billion to acquire Aligned Data Centers, marking the largest data center transaction to date. This move, facilitated by the Artificial Intelligence Infrastructure Partnership (AIP), underscores the intense focus on building the foundational elements for AI growth. Meanwhile, Amazon continues to position itself for AI-driven upside through its diversified operations in AWS, Advertising, and E-Commerce, with analysts suggesting its stock holds considerable value. Taiwan Semiconductor Manufacturing Company (TSMC) is also experiencing a surge in profits and has raised its revenue forecast, directly benefiting from increased spending on AI infrastructure. In the software realm, Palantir Technologies and Snowflake have partnered to enhance data solutions for AI applications, aiming to streamline data pipelines and analytics for businesses and government clients. Oracle is projecting strong gross margins of 30-40% for its AI data center projects. However, not all AI-focused companies are seeing smooth sailing. BigBear.ai, despite developing custom AI solutions, faces challenges with low gross margins and declining revenue, contrasting with competitors like Palantir. In other AI developments, SES AI is forming a joint venture to supply battery materials, leveraging its AI platform for discoveries. Veeva Systems is enabling AI integration in drug discovery for pharmaceutical companies, solidifying its position in the healthcare sector. ASML Holding is navigating geopolitical risks while benefiting from strong AI-related bookings for its chip manufacturing technology. JPMorgan Chase CEO Jamie Dimon acknowledges the AI boom's reality but cautions investors about its inherent risks, advising a selective approach.

Key Takeaways

• Nvidia, Microsoft, BlackRock, and xAI are acquiring Aligned Data Centers for $40 billion, the largest data center deal ever, through the Artificial Intelligence Infrastructure Partnership (AIP).
• Amazon is seen as a strong AI play due to its diversified business model, with potential upside in AWS, Advertising, and E-Commerce.
• TSMC's profits are soaring, and its revenue forecast is raised, driven by high demand for AI infrastructure chips.
• Palantir and Snowflake are partnering to offer integrated data solutions for AI applications, targeting both commercial and public sectors.
• Oracle anticipates gross margins between 30% and 40% for its AI data center projects.
• BigBear.ai faces challenges with low gross margins and revenue decline despite its AI focus, unlike competitors such as Palantir.
• SES AI is entering the battery material supply market through a joint venture, utilizing its AI platform for material discovery.
• Veeva Systems is a key player in AI-driven drug discovery software for the pharmaceutical industry.
• ASML Holding continues to secure AI-related bookings for its chip manufacturing equipment, despite anticipating reduced sales in China.
• JPMorgan Chase CEO Jamie Dimon views the AI boom as real but risky, advising investors to be selective.

Nvidia, Microsoft, xAI, BlackRock buy Aligned Data Centers for $40 billion

A group of major companies including Nvidia, Microsoft, xAI, and BlackRock have agreed to buy Aligned Data Centers for $40 billion. This deal, involving MGX and BlackRock's Global Infrastructure Partners, is the largest data center transaction ever. The Artificial Intelligence Infrastructure Partnership (AIP), formed by BlackRock, MGX, Microsoft, and Nvidia in September 2024, made this its first investment. Aligned Data Centers operates 50 campuses and is expected to close the deal late next year, pending regulatory approval.

BlackRock, Nvidia, Microsoft Invest $40 Billion in Aligned Data Centers

Investment giant BlackRock, along with Nvidia and Microsoft, is part of a consortium buying Aligned Data Centers for $40 billion. This acquisition marks the largest data center deal to date and fuels the ongoing artificial intelligence revolution. The deal was announced shortly after BlackRock reported its earnings, which saw its stock price increase.

Big Investors Bet $40 Billion on AI Infrastructure with Aligned Data Centers Deal

Nvidia, Microsoft, BlackRock, and xAI are investing $40 billion to acquire Aligned Data Centers. This significant deal signals continued strong investment in artificial intelligence infrastructure. The Artificial Intelligence Infrastructure Partnership (AIP), which includes BlackRock and Microsoft, is a key player in this acquisition. While market volatility exists, companies focused on AI infrastructure like Nvidia and Microsoft offer long-term growth potential for investors.

Amazon Stock Offers AI Exposure Without Pure-Play Risks

Amazon.com, Inc. (AMZN) is considered undervalued compared to other major tech stocks, offering a strong business model with AI integration. Despite current margin pressures from investments in logistics, data centers, and AI, Amazon is positioned for future earnings growth. Its diversified operations in AWS, Advertising, and E-Commerce provide AI-driven upside without the volatility of specialized AI companies. Financial analysis suggests Amazon stock could be worth over $400 per share.

AI Boom Powers TSMC Profits and Outperformance

Taiwan Semiconductor Manufacturing Company Limited (TSM) is outperforming due to the artificial intelligence boom. The company's quarterly results exceeded expectations, and its management has raised its full-year revenue forecast. This strong performance is driven by increased spending on AI infrastructure, highlighting TSMC's crucial role in the semiconductor industry.

BigBear.ai Faces Challenges Despite AI Focus

BigBear.ai, a small-cap AI stock, is developing custom solutions for clients like the U.S. Army and airports. However, its business model, which resembles consulting rather than scalable software-as-a-service, results in low gross margins. The company also experienced a revenue decline, unlike competitors like Palantir. These factors raise concerns about BigBear.ai's potential for explosive growth and making investors millionaires.

SES AI Forms Joint Venture for Battery Material Supply

SES AI Corporation (SES) stock rose significantly after announcing a joint venture with Hisun New Energy Materials. This partnership aims to commercially supply electrolyte materials discovered by SES AI's Molecular Universe platform. The venture marks a strategic move for SES AI into recurring revenue from material supply, validating its AI-driven battery discoveries. It leverages Hisun's manufacturing and SES AI's technology to meet demand in the electric vehicle and energy storage markets.

Veeva Systems Leads AI in Healthcare Drug Discovery

Veeva Systems provides essential software for drugmakers to integrate AI into their drug discovery processes. While the stock trades at a high valuation, its dominant market position and recurring subscription revenue are strong points. AI can make the initial drug candidate screening more efficient, though it cannot shorten clinical testing. Veeva's offerings, including Veeva Vault CRM and its electronic trial master file system, are used by top pharmaceutical companies, driving strong sales and profitability.

TSMC Profits Soar Amid Continued AI Boom

TSMC, the world's largest producer of advanced chips, has reported record profits and raised its full-year revenue forecast. This surge is driven by strong demand and spending related to artificial intelligence. The company's performance highlights the ongoing boom in the AI sector.

Palantir and Snowflake Partner for AI Data Solutions

Software companies Palantir Technologies (PLTR) and Snowflake (SNOW) have announced a new partnership to help businesses modernize their data for AI applications. This collaboration aims to create more efficient data pipelines, faster analytics, and improved AI applications for both commercial and public sector clients. The companies are already working with power management company Eaton. Both Palantir and Snowflake stocks saw increases following the announcement.

ASML Navigates China Risks with Strong AI Bookings

ASML Holding reported strong third-quarter results with high net sales and new bookings, driven by AI infrastructure demand from chipmakers. Despite anticipating a significant drop in China sales for 2026 due to trade restrictions, ASML expects overall 2026 net sales to remain at or above 2025 levels. Growth is supported by new Extreme Ultraviolet (EUV) technologies and AI partnerships, positioning ASML to benefit from the AI revolution.

Jamie Dimon Calls AI Boom 'Real But Risky'

JPMorgan Chase CEO Jamie Dimon believes the artificial intelligence boom is real but carries significant risks, likening it to a large-scale industrial build-out. He advises investors to be selective, focusing on companies with strong balance sheets and clear profitability paths, rather than chasing every AI stock. While some AI investments might be part of a bubble, Dimon expects the overall AI revolution to be rewarding.

Oracle Projects 30-40% Gross Margins for AI Data Centers

Oracle confirmed that it expects its artificial intelligence infrastructure projects to achieve gross margins between 30% and 40%. This projection aligns with the profit margins seen at other major data center companies. The company shared this outlook during its Financial Analyst Day.

Sources

• Nvidia, Microsoft, xAI and BlackRock part of $40 billion deal for Aligned Data Centers
• Big Daddy Of Wall Street Jumps Into Buy Range. Time To Buy?
• Nvidia, Microsoft, and BlackRock Just Made a $40 Billion Bet on AI Infrastructure. Here's What It Means for Investors. @themotleyfool #stocks $NVDA $MSFT $BLK
• Afraid Of The AI Bubble? Just Buy Amazon Stock (NASDAQ:AMZN)
• TSMC Continues To Outperform, Powered By The AI Boom (NYSE:TSM)
• Is BigBear.ai Your Ticket to Becoming a Millionaire? @themotleyfool #stocks $BBAI $PLTR
• Why SES AI (SES) Is Up 28.3 Percent After Joint Venture Deal to Supply Battery Materials
• This Drug Discovery Stock Is Leading the Charge In Bringing AI to Healthcare. But Is It a Buy?
• AI's boom continues as TSMC reveals a big jump in profits
• Palantir Rises, Snowflake Jumps On New AI Data Partnership
• How Strong AI-Driven Bookings and China Risks Have Altered ASML Holding's (ENXTAM:ASML) Investment Story
• Jamie Dimon drops surprising take on AI stocks
• Oracle expects AI data center gross margins to range from 30% to 40% (ORCL:NYSE)