What are the AI stocks that Citi believes will benefit from Microsoft and Meta's increased capex?

Citi believes that NVIDIA, Broadcom, AMD, and Micron will be the primary beneficiaries of Microsoft and Meta's increased cloud data center capex.

What is Citi's forecast for cloud data center capex growth?

Citi expects cloud data center capex to grow 35% year-over-year in 2025 and 15% in 2026.

How are Microsoft and Meta's businesses connected to the AI stocks mentioned?

Microsoft accounts for around 8% of AMD's sales, while Meta makes up roughly 2% of Broadcom's revenue, making them important customers for these AI-focused companies.

Home / Business and Economy / Nvidia and Broadcom Tipped to Gain from Cloud Giants' Surging Capex

Nvidia and Broadcom Tipped to Gain from Cloud Giants' Surging Capex

5 Aug

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Summary

Citi reiterates Buy ratings on Nvidia and Broadcom
Expects cloud data center capex to grow 35% in 2025 and 15% in 2026
Sees Nvidia, Broadcom, AMD, and Micron as beneficiaries of Microsoft and Meta's increased investments

Nvidia and Broadcom Tipped to Gain from Cloud Giants' Surging Capex

According to a recent report from Citi, several AI-focused technology stocks are set to gain from the increased capital expenditure (capex) of major tech companies like Microsoft and Meta. The firm has reiterated its Buy ratings on Nvidia and Broadcom, while maintaining a Neutral stance on Advanced Micro Devices (AMD).

Citi believes that Nvidia, Broadcom, AMD, and Micron Memory will be the primary beneficiaries of the cloud giants' growing investments. The analysts expect cloud data center capex to surge 35% year-over-year in 2025 and 15% in 2026, which they view as a positive catalyst for AI-exposed stocks.

Microsoft currently accounts for around 8% of AMD's sales, while Meta makes up roughly 2% of Broadcom's revenue. The increasing tech spending by these industry leaders is expected to drive demand for the products and services offered by Nvidia, Broadcom, and other AI-focused companies.

As the AI revolution continues to reshape the technology landscape, investors are closely watching the performance of these AI-driven stocks, which are poised to capitalize on the growing investments in cloud infrastructure and next-generation technologies.

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