Nvidia to benefit from Microsoft's $80 billion AI spending, potential for significant growth

From Nasdaq: 2025-01-11 03:30:00

Microsoft (NASDAQ: MSFT) plans to spend $80 billion this year on building data centers for AI models and cloud-based applications, with over half of the investment in the U.S. The company’s Azure cloud unit saw a 33% revenue increase last quarter, but capacity constraints have limited growth. Nvidia (NASDAQ: NVDA) stands to benefit from Microsoft’s data center spending, as it remains the king of GPUs with a 90% market share.

Nvidia’s largest customer, Microsoft, is set to significantly increase its GPU purchases in 2025, signaling continued growth for the chipmaker. With a P/E ratio of 31.4 and a PEG ratio of 0.98, Nvidia’s stock remains attractively priced. The company’s dominance in AI infrastructure, coupled with Microsoft’s massive data center investments, make it a solid choice for investors.

The Motley Fool’s Stock Advisor team did not include Nvidia in their list of top 10 stocks, but historical returns show the potential for significant growth. Consider investing in Nvidia for long-term gains, as the company is poised to benefit from the ongoing AI infrastructure investments by major tech players.



Read more at Nasdaq: Prediction: Nvidia Will Be the Biggest Winner in Microsoft’s $80 Billion AI Spending Spree