Hyperscalers are going all in on AI: Chart of the day

Chip companies like Nvidia (NVDA) have skyrocketed since the AI spending boom took off, doubling their revenue every quarter. However, Nvidia's latest earnings report, despite topping expectations, disappointed investors looking for returns on the monumental spending.

Catalysts Host Madison Mills digs into a Wall Street Journal chart showing the capital expenditures of AI hyperscalers since 2020, and discusses whether investors will see returns on their AI plays in the near future.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Melanie Riehl

Video transcript

Chip companies like NVIDIA have benefited greatly from the A I spending boom.

It's how they're able to more than double their revenue every quarter.

But investors also want to see evidence of A I spend paying off more broadly here with the chart of the day touching on just that is our very own catalysts.

Co anchor Madison Mills.

Hey ma, hey Brad, thanks so much.

So I'm going to pull up the chart of the day on the board here so that we can take a look at the hyper scalers here.

You've got Amazon Microsoft and me in that group.

This chart shows their capital expenditure quarter over quarter on A I just in the last quarter, you spending over $50 billion on A I alone.

So the big question for investors, they actually originally were looking at this spend as a positive catalyst for the stocks.

Now they're starting to question that they're saying, hey, is this spend going to get us anywhere?

And that was the key question at the Goldman Sachs conference that I was out over the last couple of days here, we spoke with Cash and he over a Goldman Sachs and he said these are the cloud names that benefited greatly from spending a lot of money on cloud infrastructure and they're gonna have the exact same experience this time around the last day of the conference.

I went to a meeting of a bunch of different VC folks who all said that these are the names that you're gonna see.

Hockey stick moves in as we move out of this seasonally bearish time of year for September and October.

You're gonna see a lot of growth in these names.

And guys, I got to bring this up because I jealous, I didn't get to talk about it with you while I was gone.

That oracle earnings call when Larry Ellison kind of went on a little bit of a rant saying he just doesn't understand the questions about the impact of A I it's not a thing you can sell, but it's going to impact literally everything.

And that is what companies like these are banking on moving forward and he's trying and hoping that he's gonna get that message out there sooner rather than later.

It seems like it's working, it's working now.

You do look at this.

All right, Maddie.

Thanks so much.