Nvidia Stock ( NASDAQ:NVDA )
After data revealed that major hyperscalers are anticipated to increase cloud investment in the near future, Bank of America kept its buy ratings on Nvidia ( NASDAQ:NVDA ), Broadcom ( NASDAQ:AVGO ), AMD ( NASDAQ:AMD ), and many other semiconductor firms on Wednesday.
According to analyst Vivek Arya’s note to clients, big cloud providers like Meta ( NASDAQ:META ), Amazon ( NASDAQ:AMZN ), and Google ( NASDAQ:GOOGL ) are expected to increase cloud investment by $44.3 billion in the fourth quarter. The 7% annual growth rate would be the lowest since 2019, but data for 2023 shows that cloud spending is set to increase to $178 billion for the entire year, growing 6% annually, somewhat higher than the firm’s 5% projection. This is much below the 28% compound annual growth rate and more in line with the 2019 recession, but given that cloud, expenditure can be “volatile in nature,” as Arya put it, there are some areas of strength.
Cloud spending “is historically volatile in nature (spending growth over 2 to 3 years, digestion over 2 to 3 [quarters]), but we look beyond near-term macro, focusing on 25% to 30% historical spending [compound annual growth rate] necessary to support growing cloud activity,” Arya wrote in a note to clients.
Oracle, Nvidia Stock, and other semiconductor stocks
Oracle ( NYSE:ORCL ), which is increasing its cloud ...
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