AI boom boosts 4 stocks – and you know them all – as market confidence grows

Big Tech companies are doubling down on AI investments, countering warnings of an AI bubble as revealed in their Q1 2025 earnings reports. Alphabet, Amazon, Microsoft, and Meta Platforms are maintaining or increasing their capital expenditure commitments for AI and cloud infrastructure, signaling continued confidence in the technology’s growth trajectory. This sustained investment from major hyperscalers provides critical validation for the AI infrastructure sector and offers reassurance to investors concerned about potential pullbacks.

The big picture: Major tech companies are resisting pressure to reduce AI spending despite economic uncertainties, demonstrating their strategic commitment to AI capabilities.

• Alphabet, Amazon, Microsoft, and Meta are all maintaining or increasing their capital expenditure commitments specifically for AI and cloud infrastructure.
• AMD‘s better-than-expected quarterly results and optimistic guidance further validate the health of the AI infrastructure ecosystem.

Why this matters: The continued aggressive investment counters bearish predictions that tech companies would need to curtail AI spending due to overextension.

• Many skeptics had warned that aggressive early infrastructure buildouts would force a pullback, particularly in an uncertain economic environment.
• Instead, these companies are signaling that AI capacity remains a top strategic priority for 2025 and beyond.

What they’re saying: AMD CEO Lisa Su expressed confidence in the sustained nature of AI investments based on recent customer behavior.

• “It gives us confidence that people aren’t making very short-term decisions right now,” Su told CNBC, noting that April ordering patterns were “quite robust.”
• “The continued investment by the hyperscalers, even amid macroeconomic uncertainties, came as a major relief to the AI infrastructure theme,” said Jeff Marks, Investing Club’s director of portfolio analysis.

Behind the numbers: The sustained investments from hyperscalers have significant implications for the broader AI hardware ecosystem.

• AMD’s data center revenue exceeded forecasts, suggesting strong demand for AI-related computing resources.
• The positive outlook comes despite AMD facing a $700 million headwind from China, indicating domestic demand strength is more than compensating.

Looking ahead: The Q1 earnings suggest continued momentum for AI-related investments through 2025.

• According to Barclays, the hyperscalers’ earnings reports are “supportive of continued AI investment (and continued AI enthusiasm) among investors, for now.”
• Investors will be watching closely for confirmation of these trends when Nvidia reports on May 28 and Broadcom on June 5.