AI Infrastructure Spending Nears Bubble Levels but Valuations Remain Reasonable

Industry Impact 4
โดย The Motley Fool·Read original
Summary · why it matters

Goldman Sachs projects total AI capital expenditures will reach about $765 billion in 2026, representing 2.4% of projected U.S. GDP and exceeding levels seen during the dot-com bubble. However, as a share of projected global GDP of $126 trillion, AI spending is only about 0.6%. The four largest hyperscalers—Amazon, Microsoft, Alphabet, and Meta Platforms—are set to spend more than $700 billion this year alone. Unlike the dot-com era, hardware stocks such as Nvidia and Micron Technology trade at modest forward price-to-earnings multiples of 23.5 and 6.5 times fiscal 2027 estimates, respectively, while most software-as-a-service stocks have dramatically lower valuations. The hyperscalers are seen as a defensive way to participate in AI upside because their strong core businesses generate significant operating cash flow to fund infrastructure spending.

Impact on stocks 10

Artificial Intelligence▲ · 8 stocks
NVIDIA Corporation
NVDA
▲ PositiveCapitalrelevance

Article notes Nvidia trades at modest forward P/E of 23.5x, implying reasonable valuation despite massive AI capex spending.

Amazon.com Inc
AMZN
▲ PositiveCapitalrelevance

Hyperscalers like Amazon are spending heavily on AI infrastructure, which is funded by strong core business cash flows, and the article notes valuations remain reasonable.

Alphabet Inc Class C
GOOG
▲ PositiveCapitalrelevance

Alphabet is one of the four largest hyperscalers increasing AI capex, with strong core business cash flows supporting spending, and valuations are reasonable.

Meta Platforms Inc.
META
▲ PositiveCapitalrelevance

Meta is among the top hyperscalers boosting AI infrastructure spending, funded by robust operating cash flow, and valuations are not excessive.

Microsoft Corporation
MSFT
▲ PositiveCapitalrelevance

Microsoft is a major hyperscaler increasing AI capex, with strong core business cash flows, and the article highlights reasonable valuations.

Semiconductors▲ · 1 stocks
Micron Technology Inc
MU
▲ PositiveDemandrelevance

Micron is a hardware stock benefiting from AI infrastructure spending; its low forward P/E of 6.5x suggests demand for its memory chips is strong.

Financials▲ · 1 stocks

Theme Impact 4

Related news

IREN Fair Value Trimmed to US$79.03 as AI Cloud Wins Meet Build Out Risks

IREN's fair value estimate has been trimmed from US$80.93 to US$79.03, a modest adjustment reflecting a mix of growing AI cloud contracts and ongoing questions around execution and supply build out through 2027. The revision lifts revenue growth assumptions to 168.01% from 125.79% and net profit margin expectations to 11.73% from 5.79%, while the future P/E assumption drops to 31.26x from 90.29x and the discount rate rises to 9.41% from 8.83%. On the bullish side, JPMorgan shifted IREN from Underweight to Overweight with a US$65 price target, citing a partnership with Nvidia, new customer signings and higher industry pricing, while H.C. Wainwright raised its target to US$90 after IREN announced US$2.8b of new multi year AI cloud contracts and lifted its 2026 AI cloud annual recurring revenue target to more than US$4b. Northland initiated IREN at Outperform with a US$99 price target, and Freedom Capital upgraded the stock from Hold to Buy. Freedom Capital nonetheless flagged execution on supply additions over the next two years as a central risk, noting the story depends heavily on adding capacity on schedule.
IREN ▲JPM ▲
Artificial Intelligence ▲Cloud & Digital Infrastructure
Simply Wall St·9hRead more →
▲impact 4

Nvidia-Backed Nscale Files for US IPO After $1.02 Billion Loss

Nscale, the London-based AI data center developer backed by Nvidia and Microsoft, filed publicly for an initial public offering in New York, seeking to raise as much as $3 billion. The company reported a net loss of $1.02 billion on revenue of $140.6 million for the six months ended June 30, compared with a net loss of $368.9 million on revenue of $10.4 million a year earlier, according to its Friday filing with the US Securities and Exchange Commission. Spun off from a cryptocurrency mining operation in early 2024, Nscale was valued at about $14.6 billion in a March Series C round led by Aker ASA and 8090 Industries, with Nvidia and Nokia Oyj also participating. The company has agreed to add more than 30,000 Nvidia chips to an existing rental agreement with Microsoft at its Narvik, Norway gigafactory, and Anthropic has agreed to spend $45 billion to rent AI cloud computing power from its flagship West Virginia data center development. The offering is being led by Goldman Sachs, JPMorgan Chase and Morgan Stanley, with shares expected to trade on the New York Stock Exchange under the symbol NSCL.
NVDA ▲MSFT ▲GS ▲JPM ▲MS ▲0MJX.LSE
Artificial Intelligence ▲Cloud & Digital Infrastructure
Bloomberg·10hRead more →
▼2impact 4

Goldman Sachs Warns S&P 500 Earnings Growth Set to Cool

Goldman Sachs Group expects the rapid rise in S&P 500 earnings to cool rather than reverse, saying several temporary forces are currently lifting profits. S&P 500 earnings per share rose 51% year over year in the second quarter, with growth over the past four quarters reaching 26%, a pace the firm said has pushed profits above their longer-term trend, though the index's forward price-to-earnings ratio has eased to 19 from 23 a year ago and now matches its 10-year average. Artificial intelligence spending is a major contributor, with Amazon, Meta Platforms, Microsoft and Alphabet expected to spend about $800 billion on capital projects this year, nearly double 2025 levels, and Goldman expects that earnings boost to fade as spending growth slows and depreciation rises. Semiconductor margins and gains from technology companies' investment holdings are also supporting earnings, and Goldman said weaker chip margins could cut S&P 500 earnings by about 10%, while investment gains that helped second-quarter profits are expected to contribute less in 2027.
GS AMZN GOOG META MSFT
Artificial Intelligence ▼Semiconductors ▼
GuruFocus·10hRead more →
© 2026 MarketDXNews