Alphabet Plans $75 Billion In Capex For 2025

Alphabet, the parent company of Google, revealed on Tuesday during its earnings call that it intends to invest a significant $75 billion in capital expenditures (capex) in 2025. This marks a substantial increase from the $52 billion spent in 2024 and surpasses Wall Street’s expectations. The move signals Alphabet’s continued commitment to the rapidly evolving artificial intelligence (AI) sector, underscoring its ongoing investment in technology development as the AI race intensifies.

While the announcement initially sent Alphabet’s stock down more than 7% earlier in the day—reflecting investor concern about the size of the spending—the increased capital expenditure forecast bodes well for semiconductor companies, which stand to gain from this significant investment.

Alphabet’s planned spending should provide some relief to investors, especially in light of last week’s steep tech sell-off, driven by concerns over China’s DeepSeek AI model potentially reshaping the investment landscape for advanced chips essential to AI model training.

The news also had a positive impact on chipmaker stocks. Nvidia, which saw a staggering $589 million loss in market capitalization during the previous week’s tech downturn, rebounded on Wednesday, climbing nearly 5% to trade at $124.08 by midday. Broadcom, another major player in the semiconductor industry, saw its shares rise more than 6%, reaching $236.17.

Shares of Taiwan Semiconductor Manufacturing Company (TSMC) rose 3%, Super Micro Computer saw a 10% gain, and Micron Technology climbed 2%.

Analysts from Melius Research noted the beneficial impact of Alphabet’s capex investment on companies like Broadcom and Nvidia, both of which are key players in AI hardware. They pointed out that Broadcom’s role in supplying custom silicon accelerators for Google and Nvidia’s partnership in Google Cloud further strengthens the case for these stocks.

“The decision to allocate $75 billion toward capex—higher than both our estimate of $66 billion and the Street’s estimate of $58 billion—may have surprised some investors, but it aligns with the ongoing AI arms race among tech giants,” said Richard Kramer, a senior analyst at Arete Research, in an interview.

Other major tech companies have also indicated strong spending intentions for the coming year. Meta announced plans to significantly expand its AI teams and increase its capex to $65 billion in 2025, up from $60 billion in 2024. Microsoft revealed its capex budget for its 2025 fiscal year would reach approximately $80 billion, reflecting a 96% increase over the same period last year.

Tesla, too, anticipates spending more than $11 billion on capital expenditures over the next two years, according to recent filings.

The coordinated ramp-up in spending across the tech sector signals a unified focus on AI development, with major industry players such as Zuckerberg, Nadella, Cook, and Musk reinforcing their commitment to AI innovation, according to Wedbush Securities analyst Dan Ives. In a recent post on social media platform X, Ives summarized the broader tech trend: “Huge week for Big Tech earnings as Zuckerberg, Nadella, Cook, and Musk doubled down on their AI visions and what this means for each of these tech stalwarts looking ahead.”