In a significant move reflecting the growing demand for artificial intelligence (AI) infrastructure, major tech companies are ramping up their investments in chip technology. Nvidia is positioned to benefit from this trend as Microsoft and Meta Platforms unveil ambitious spending plans that surpass Wall Street”s expectations.
During its fiscal second quarter, Microsoft reported capital expenditures totaling $37.5 billion, exceeding the consensus estimate of $36.7 billion. Notably, approximately two-thirds of this spending is directed towards AI chips. CFO Amy Hood highlighted that the limited availability of AI hardware continues to hinder cloud computing growth. While Microsoft is developing its own Maia 200 AI chip, it continues to source chips from both Nvidia and AMD. CEO Satya Nadella emphasized the importance of not relying on a single supplier, indicating a strategy of collaboration with multiple chip manufacturers.
Meta Platforms is also significantly increasing its capital expenditures, projecting spending could reach up to $135 billion by 2026. This figure is 20% above what analysts anticipated and nearly double its investment from the previous year. CFO Susan Li noted that demand for compute resources is outpacing supply, leading to a supply crunch that is expected to persist throughout much of 2026. The company plans to enhance its capacity, but new facilities will not come online until later in that year.
In a positive development for Nvidia, Chinese regulators recently approved the sale of its H200 chips to domestic tech giants such as ByteDance, Alibaba, and Tencent. This marks a notable shift in China”s regulatory stance, which previously encouraged the use of domestic alternatives. Earlier, the U.S. had authorized the sale of H200 chips to China, but uncertainty lingered until this recent approval. Nvidia had indicated that restrictions on exports to China resulted in an $8 billion sales loss in May.
The semiconductor sector as a whole is showing resilience, with other companies reporting robust earnings. Dutch chipmaker ASML surpassed expectations with its fourth-quarter results and received higher-than-anticipated orders. Meanwhile, South Korea”s SK Hynix reported record profits for 2025, reflecting a strong performance in the industry. The VanEck Semiconductor ETF also saw a gain of 1.9% during this period.
On Wednesday, Nvidia”s shares closed at their highest level since early November, although they dipped by 0.7% in after-hours trading. The overall market sentiment remains positive as investors grow increasingly confident in the escalating demand for AI chips driven by the expansion efforts of major tech companies.
