AI Boom Puts Nvidia, Alphabet and Amazon in Focus

December 14, 2025 at 19:16 UTC

6 min read

AI investment surge with Nvidia, Alphabet, Amazon stock charts and technology growth visuals

Key Points

Nvidia, Alphabet and Amazon are central to a massive AI infrastructure spending wave into 2026
Alphabet is pairing strong AI-driven growth with soaring capex and mounting EU antitrust scrutiny
Amazon’s AWS wins major AI workloads but faces investor concern over shrinking margins and heavy spending
Wall Street still sees substantial upside for Nvidia as it dominates data center GPUs and expands product roadmaps

AI Infrastructure Spending Drives Market Leaders

Across the technology sector, artificial intelligence is the dominant growth driver heading into 2026, with Nvidia, Alphabet and Amazon at the center of the build‑out. Nvidia’s graphics processing units (GPUs) have become the standard chips for training and running AI models in data centers, helping lift its market capitalization to about $4.3 trillion and making it the world’s largest company. The company’s data center revenue reached $51.2 billion in its latest reported quarter, up 66% year over year, and management is guiding for fiscal 2026 revenue of roughly $213 billion, implying about 62% growth from the prior year. Wall Street estimates suggest revenue could rise a further 48% to $316 billion in fiscal 2027. Analysts and company forecasts point to a sustained AI capex cycle: Nvidia estimates global data center capital expenditures could rise from $600 billion in 2025 to as much as $3 trillion to $4 trillion by 2030. At the same time, large cloud providers are sharply increasing their own spending. Alphabet has repeatedly raised its 2025 capital expenditure outlook to $91 billion–$93 billion, largely to support AI infrastructure, while Amazon lifted its 2025 capex plan from $118 billion to $125 billion, also primarily for AI‑related projects.

Nvidia Extends GPU Lead Amid Competitive Pressure

Nvidia continues to expand its AI hardware roadmap while facing rising competition. Its current Blackwell Ultra architecture offers up to 50 times the performance of its 2022 Hopper chips, and the company plans to introduce a new Rubin architecture in 2026 that could deliver 3.3 times more performance than Blackwell Ultra. Nvidia holds more than 90% share of the data center GPU market and also supplies generative AI networking equipment and rack‑scale systems that integrate GPUs, CPUs and networking. Its CUDA software ecosystem, which runs only on Nvidia GPUs, is cited as a key competitive advantage. Despite concerns about an AI bubble and a recent pullback in the stock, analysts polled by S&P Global Market Intelligence expect Nvidia’s annual profit of about $99.2 billion to grow nearly 44% per year over the next five years. Several Wall Street targets reflect this optimism: among 70 analysts, the median price target of $250 implies about 43% upside from roughly $175, with the highest target at $352. One analyst has projected Nvidia could reach a $20 trillion market value by 2030 if revenue compounds in the mid‑30% range and AI capex continues to expand.

Alphabet Builds a Full‑Stack AI and Cloud Platform

Alphabet is combining AI models, custom silicon and cloud infrastructure into what management describes as a full‑stack AI offering. Its Gemini 3 generative AI chatbot is positioned as a competitor to OpenAI’s ChatGPT and is available via Google Cloud and consumer subscriptions. AI features are being integrated into core products: Google Search now includes AI Overviews and an AI mode, which management says are helping retain search volume and drive “meaningful query growth.” In the third quarter of 2025, Alphabet reported revenue of $102.3 billion, up 16% year over year, with advertising still the largest contributor. Google Cloud revenue rose 34% to about $15.2 billion, and the cloud backlog reached roughly $155 billion, up 46% sequentially. Alphabet is also pushing deeper into AI hardware. Its seventh‑generation Ironwood Tensor Processing Unit (TPU) is described as delivering up to 10 times the performance and superior cost efficiency versus prior TPUs, and four times the performance of its immediate predecessor. Ironwood underpins AI supercomputing pods for cloud clients, and has attracted large deals: Anthropic plans to access up to 1 million of Alphabet’s custom chips, and Meta Platforms signed a six‑year, $10 billion Google Cloud agreement to host AI workloads. Reports also indicate Apple may use Gemini models to enhance Siri. Alphabet’s AI initiatives are supported by substantial shareholder returns, including a quarterly dividend of $0.21 per share and large ongoing share repurchases.

Regulatory and Cost Pressures Confront Alphabet

Alphabet’s AI expansion is occurring alongside intensifying regulatory scrutiny and rising capital intensity. In Europe, regulators have opened an antitrust investigation into Google’s use of publisher content and YouTube videos for AI training and AI Overviews, focusing on compensation and opt‑out mechanisms. Separate EU actions target compliance with the Digital Markets Act, including alleged self‑preferencing in search results, and Google Play rules that may restrict developers from steering users to cheaper offers. Potential penalties in such cases have been described as reaching up to 10% of global revenue, depending on findings. At the same time, Alphabet’s capex has grown to roughly half of operating cash flow as it scales AI data centers and power infrastructure, including expanded energy partnerships and subsea cable projects. Analysts note that this spending could weigh on free cash flow if returns lag expectations, even as consensus forecasts call for earnings per share to rise from $10.48 in 2025 to $14.54 by 2028, with the forward price‑earnings multiple projected to compress below 20 by 2028. Market data compiled by services such as MarketBeat and TD Cowen show a “Moderate Buy” consensus on Alphabet, with average price targets modestly above recent trading levels around $310.

Amazon Balances AWS AI Growth With Margin Concerns

Amazon is also reshaping its business around AI, though its stock has lagged some peers in 2025. Shares recently traded near $226, giving the company a market value of about $2.4 trillion and leaving the stock roughly flat year‑to‑date and below its 52‑week high. Amazon Web Services (AWS) remains the main profit engine, generating about 60% of company operating income through the first three quarters of 2025 while contributing less than 20% of revenue. AWS revenue grew 20% year over year in the latest quarter to roughly $33 billion. A key recent catalyst is a seven‑year, $38 billion cloud services agreement with OpenAI, which will give the startup access to hundreds of thousands of Nvidia GPUs on AWS by the end of 2026. At its re:Invent conference, Amazon highlighted new Nova AI models, agentic AI tools and its Trainium3 custom chips, positioning AWS as both an infrastructure and model provider. Amazon is also developing its own Graviton5 processors for EC2 M9g instances, which it says deliver 25% better performance than prior generations for general workloads, reducing dependence on external chip suppliers. Beyond cloud, Amazon is monetizing its e‑commerce scale through advertising, collecting more than $47 billion in ad revenue in the first three quarters of 2025, up 20% year over year. However, investors remain focused on shrinking AWS margins, low‑margin retail operations and the company’s decision to raise 2025 capex to $125 billion, with expectations for heavy AI‑related spending again next year.

Key Takeaways

AI infrastructure is driving record revenue and capex at Nvidia, Alphabet and Amazon, but also raising questions about long‑term returns on these investments.
Nvidia retains a dominant position in data center GPUs and enjoys strong analyst support, with forecasts for rapid earnings growth and substantial potential upside.
Alphabet is evolving into a vertically integrated AI and cloud provider, yet must manage EU antitrust actions and the impact of very high capital spending on cash flows.
Amazon’s AWS unit is securing marquee AI workloads and building custom chips, while the broader business leans more on high‑margin advertising to offset thin retail margins.
Across these companies, investors are weighing powerful AI‑driven growth against regulatory risk, margin pressure and the financial demands of large‑scale data center build‑outs.