Alphabet Says Its AI Spending Will Keep Rising. 2 Data Center Stocks to Buy and Hold Through 2030.
If Alphabet plans to spend even more in 2027, why are two data center suppliers trading so far below their highs?
Alphabet, the parent company of Google, is increasing its spending on artificial intelligence infrastructure. In the third quarter of 2026, Alphabet spent $51.4 billion on capital projects, more than double the amount spent in the previous year. The company expects its spending to continue growing in 2027, with the bottom of its 2026 range forecasted at $195 billion to $205 billion.
Microsoft, another major player in the tech industry, spent $45.2 billion in its fiscal first quarter, slightly below its initial guidance. Both Alphabet and Microsoft are investing heavily in data center infrastructure, particularly chips from Nvidia and Vertiv. Nvidia's revenue surged 106% year over year to $96.2 billion, while Vertiv reported a 61% year-over-year increase in net sales.
Analysts expect Nvidia to earn around $15.90 a share in fiscal 2028, with a price-to-earnings multiple of 14, while Vertiv trades at about 26 times expected earnings, reflecting a premium due to its non-GAAP operating margin growth.
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