Nvidia Stock Investors Just Got Great News From Amazon and Google-Parent Alphabet

Alphabet CEO Sundar Pichai provided similar insights. He said a greater percentage of capital expenses are shifting toward inference as training becomes less expensive, implying DeepSeek’s breakthroughs would not slow AI spending. Indeed, CFO Ana Ashkenazi told analysts that capital expenditures would total $75 billion in 2025, up from $52 billion in 2024, due primarily to investments in data centers, servers, and networking.

The capital spending guidance from Amazon and Google parent Alphabet corroborates the narrative that demand for Nvidia GPUs could actually increase as training costs decline because companies will shift their resources toward inference. Andy Jassy compared the situation to how cloud computing sales have actually increased over time despite cloud services becoming less expensive.

“What happens is companies will spend a lot less per unit of infrastructure, and that is very, very useful for their businesses. But then they get excited about what else they could build that was always cost-prohibitive before, and they usually end up spending a lot more in total on technology once you make the per unit cost less. I think that is very much what’s going to happen here in AI.”

Wall Street estimates Nvidia’s adjusted earnings will grow at 52% annually through fiscal 2026, which ends in January 2026. That consensus makes the current valuation of 50 times adjusted earnings look cheap. Admittedly, analysts have set a very high bar, so the stock could fall sharply if Nvidia misses those expectations.

Here is the bottom line: Nvidia shareholders worried about the DeepSeek drama can take a deep breath. Many analysts think more efficient AI training techniques will lead to greater demand for Nvidia GPUs. And evidence from the largest hyperscale cloud companies supports that conclusion.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Trevor Jennewine has positions in Amazon and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, and Nvidia. The Motley Fool has a disclosure policy.

Nvidia Stock Investors Just Got Great News From Amazon and Google-Parent Alphabet was originally published by The Motley Fool