Expansion of AI infrastructure investment centered on NVIDIA $NVDA and its impact on the stock market
1 ️ ︎ Current status and long-term prospects of AI infrastructure investment
Investing in AI infrastructure has become a top priority in the current technology sector. Eric Swords (Boya Investment Management) points out that “the construction of AI infrastructure is far from complete, and the growth prospects that can be expected over the next few years are very bright.” Furthermore, this trend is “still just emerging from the dugout,” and AI hardware brands are expected to grow in the medium to long term.
According to Needham's report, there is a possibility that investment in data center infrastructure necessary to support generative AI will eventually reach 6 trillion dollars (about 870 trillion yen). This huge investment scale suggests that AI infrastructure construction is a large-scale project over a long period of time.
2 ️ 8.1 Expectations for NVIDIA $NVDA's financial results and stock price trends
There is a high possibility that NVIDIA $NVDA's financial results announcement next week will confirm the strength of AI demand and push the stock price to the highest level again. The company's stock price has recovered nearly 30% from the most recent low, and is still approaching 6.1% until the highest price. Morgan Stanley analyst Charlie Chan predicts that NVIDIA's financial results “will dispel concerns and encourage stock price recovery across the AI supply chain.”
3 ️ ︎ Major Technology Companies' AI Investment Commitments
Major technology companies that account for 40% or more of NVIDIA's sales, such as Microsoft $MSFT, Amazon $AMZN, Alphabet $GOOGL, and Meta $META, have emphasized their commitment to AI investment in financial statements. The CEOs of these companies have shown an attitude of spending rather excessively in order to avoid the risk of insufficient investment in AI technology.
Bryant Bancronkite (All Spring Global Investments) has stated, “There is no limit on resources for such a large enterprise, and if you think that your company's superiority will be jeopardized if you miss AI, you can spend years on AI.”
4 ️ ︎ Valuation and risk of AI hardware-related stocks
AI hardware-related brands are currently traded at high valuations. This reflects expectations for continued AI spending, but at the same time, it also contains risks. Mr. Bankronkite points out that “NVIDIA's valuation can be justified if the sustainability of the profit trend can be guaranteed,” while “if companies that spend stop spending, such companies are rewarded while there are only negative aspects for hardware companies.”
5 ️ ︎ Investors' and Analysts' Views
Solita Marcelli, chief investment officer in charge of the Americas at UBS Global Wealth Management, predicts there is a possibility that capital investment of major high-tech companies will increase by up to 25% in 2025. This greatly exceeds the 10-15% increase predicted by consensus, and “works positively for AI enablers in the semiconductor field in particular.”
Meanwhile, Morgan Stanley has expressed the view that the current pace of spending is sustainable. The average capital investment intensity, which indicates the ratio of capital investment to sales, is approximately 25%, and this is evaluated as a “healthy level.” Also, it is stated that the ratio of capital investment to EBITDA “shows sufficient cash flow for expenditure.”
📍 Expansion of AI investments and their impact on the market
Large-scale investments in AI infrastructure are bringing huge growth opportunities to AI hardware-related companies, starting with NVIDIA $NVDA. The strong commitment of major technology companies and predictions of long-term market size growth suggest the sustainability of investment in this field.
However, there are also risk factors, such as high valuations and concerns about the ROI of AI investments. Investors need to evaluate AI-related stocks from a long-term perspective while carefully evaluating the competitiveness, financial status, and market trends of individual companies.
Future focuses include NVIDIA's financial results and their impact on the market, specific results of AI investment by major technology companies, and the impact of changes in the macroeconomic environment on AI investment. By comprehensively analyzing these factors, it will be possible to more appropriately evaluate long-term trends in AI infrastructure investment and the investment value of related companies.
Investing in AI infrastructure has become a top priority in the current technology sector. Eric Swords (Boya Investment Management) points out that “the construction of AI infrastructure is far from complete, and the growth prospects that can be expected over the next few years are very bright.” Furthermore, this trend is “still just emerging from the dugout,” and AI hardware brands are expected to grow in the medium to long term.
According to Needham's report, there is a possibility that investment in data center infrastructure necessary to support generative AI will eventually reach 6 trillion dollars (about 870 trillion yen). This huge investment scale suggests that AI infrastructure construction is a large-scale project over a long period of time.
2 ️ 8.1 Expectations for NVIDIA $NVDA's financial results and stock price trends
There is a high possibility that NVIDIA $NVDA's financial results announcement next week will confirm the strength of AI demand and push the stock price to the highest level again. The company's stock price has recovered nearly 30% from the most recent low, and is still approaching 6.1% until the highest price. Morgan Stanley analyst Charlie Chan predicts that NVIDIA's financial results “will dispel concerns and encourage stock price recovery across the AI supply chain.”
3 ️ ︎ Major Technology Companies' AI Investment Commitments
Major technology companies that account for 40% or more of NVIDIA's sales, such as Microsoft $MSFT, Amazon $AMZN, Alphabet $GOOGL, and Meta $META, have emphasized their commitment to AI investment in financial statements. The CEOs of these companies have shown an attitude of spending rather excessively in order to avoid the risk of insufficient investment in AI technology.
Bryant Bancronkite (All Spring Global Investments) has stated, “There is no limit on resources for such a large enterprise, and if you think that your company's superiority will be jeopardized if you miss AI, you can spend years on AI.”
4 ️ ︎ Valuation and risk of AI hardware-related stocks
AI hardware-related brands are currently traded at high valuations. This reflects expectations for continued AI spending, but at the same time, it also contains risks. Mr. Bankronkite points out that “NVIDIA's valuation can be justified if the sustainability of the profit trend can be guaranteed,” while “if companies that spend stop spending, such companies are rewarded while there are only negative aspects for hardware companies.”
5 ️ ︎ Investors' and Analysts' Views
Solita Marcelli, chief investment officer in charge of the Americas at UBS Global Wealth Management, predicts there is a possibility that capital investment of major high-tech companies will increase by up to 25% in 2025. This greatly exceeds the 10-15% increase predicted by consensus, and “works positively for AI enablers in the semiconductor field in particular.”
Meanwhile, Morgan Stanley has expressed the view that the current pace of spending is sustainable. The average capital investment intensity, which indicates the ratio of capital investment to sales, is approximately 25%, and this is evaluated as a “healthy level.” Also, it is stated that the ratio of capital investment to EBITDA “shows sufficient cash flow for expenditure.”
📍 Expansion of AI investments and their impact on the market
Large-scale investments in AI infrastructure are bringing huge growth opportunities to AI hardware-related companies, starting with NVIDIA $NVDA. The strong commitment of major technology companies and predictions of long-term market size growth suggest the sustainability of investment in this field.
However, there are also risk factors, such as high valuations and concerns about the ROI of AI investments. Investors need to evaluate AI-related stocks from a long-term perspective while carefully evaluating the competitiveness, financial status, and market trends of individual companies.
Future focuses include NVIDIA's financial results and their impact on the market, specific results of AI investment by major technology companies, and the impact of changes in the macroeconomic environment on AI investment. By comprehensively analyzing these factors, it will be possible to more appropriately evaluate long-term trends in AI infrastructure investment and the investment value of related companies.
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