Microsoft and Meta’s earnings are making every part of the AI supply chain surge
The AI capex tree is growing to the sky, lifting profit expectations for a host of companies.
I didn’t hear no bell.
Two knockout earnings reports from tech heavyweights, Microsoft and Meta, aren’t just causing their stocks to soar this morning — they’re lifting the entire AI complex.
These companies are blowing away analysts’ expectations in large part because of their AI capabilities. And if something is making you money, you’re willing to invest more into it. Especially if some recent tax tweaks are making that even easier to finance.
Microsoft’s guidance of $30 billion in capex for the current quarter implies a run rate of $120 billion for fiscal 2026. Meta hinted that fiscal 2026 business investment could approach the $100 billion mark.
Zuckerberg? We know he’ll spend billions on just about anything. Nadella? Well, that’s a different story. Beyond the DeepSeek freak-out, perhaps the top source of worries about an AI capex slowdown this year centered on the cloud giant maybe having too many data centers.
The AI tree of capex is growing to the sky — and this tree’s branches are poised to grow even closer to the sun very soon, as it doesn’t yet incorporate this recent guidance from these two hyperscalers.
All that capex is the earnings of other major companies. And we’re seeing the impact of this continued commitment to spending billions upon billions rippling through the AI supply chain in premarket trading.
Well, if AI is supply-constrained right now, any extra access you can get to Nvidia’s high-powered GPUs is a plus. CoreWeave, on that note, is up double digits.
But also... you’re just going to want more of those chips. Nvidia and Advanced Micro Devices are more than 2% higher.
You’re probably going to want to house those chips in dedicated servers within your data centers. Well, look at Super Micro Computer and Dell, up 2.5% and 1.5%, respectively.
Those data centers don’t exist in a vacuum. They need plenty of supporting electronic and physical infrastructure. Turn to Monolithic Power Systems, GE Vernova, Vertiv Holdings, and Arista Networks, among others. All are up between 1% and 3% this morning.
And for any of this to function, you’ll need power. Vistra is up more than 2%, while Constellation Energy is up more than 1%.
For now, the story of AI capex remains a virtuous cycle, a rising tide that is lifting many, many boats.
