Nvidia is the largest beneficiary of AI spending for large tech companies.
However, the Amazon and Meta platforms are two tech giants who are seeing extremely strong results from their investments in AI, and their future could brighten even more.
Both trade with compelling valuations, especially compared to how expensive Nvidia has become.
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Since October 2022, nvidia Its value has increased by more than $4 trillion. To put that into perspective, there are no other companies today, even worth $4 trillion.
The huge surge in the value of graphics processing units (GPUs) manufacturers comes from several large high-tech companies that spend hundreds of millions of chips each year. The four biggest hyperscalers are expected to spend around $380 billion on AI infrastructure this year, leading to a significant step up in costs for next year.
Nvidia has been set up to be the main beneficiary of its spending increase for some time, but that doesn't mean that stocks will continue to rise. Market prices are based on what investors expect in the future, and expectations for Nvidia remain high.
However, the other two AI stocks appear to be able to exceed investors' expectations, and by 2030, the companies will surpass NVIDIA's value.
Image source: Getty Images.
With the continued growth of AI spending, investors are increasingly confident that NVIDIA can maintain a passionate sales growth.
All three major public cloud providers have repeatedly experienced demand exceeding computing power. This means that you will continue to spend increasing amounts of money to meet the needs of your customers. Nvidia, on the other hand, sells as quickly as it makes chips. This increased the company's first quarter revenue by 69% and adjusted revenue by 59%.
However, growth is unlikely to continue at this rate. All four Hyper Scholars work on custom silicon solutions for their own AI training. Microsoft It reportedly plans to shift the majority of its spending to MAIA300 chips in the second half of 2026. Meta Platform (NASDAQ: Meta) We are working to expand the AI workloads that Custom Meta Training and Inference Acceleration (MTIA) chips can handle.
And in addition to that, AMD While continuing to offer excellent priced performance, it is beginning to show progress by keeping up with Nvidia.
With Nvidia facing fierce competition for shares of its data center servers and it is fighting against a large number of laws, investors should expect a massive slowdown in sales. Once the power of supply and demand reaches equilibrium, chipmakers may not be able to order such a high total margin. It allowed us to weigh revenue growth.
However, investors seem to think these risks will not be realized as stocks are currently trading at more than 42 times positive revenues. I think it's likely that they'll keep Nvidia from continuing to outperform the market at such a passionate pace.
If investors want to leverage AI growth to buy stocks in large tech companies, the following two industry giants will increase their value. In fact, I expect them to be worth more than Nvidia by 2030.
Amazon(NASDAQ: AMZN) It is the world's largest public cloud computing provider with Amazon Web Services (AWS), and has become one of Nvidia's biggest customers. The company was arrested flat in 2022 as generative AI took off, but management quickly caught up with the competition thanks to its investment in humanity.
Management continues to see strong demand for AI services, with revenues doubled year by year. However, AWS' scale surrounds its strong growth.
The Cloud Services segment has generated $116 billion in revenue over the past 12 months. This is about 55% greater than Microsoft, the closest competitor. However, AWS' 17% year-on-year growth appears disappointing compared to Cloud Services' 39% growth last quarter. Despite this, Amazon has largely maintained its market share despite strong growth from its competitors.
More importantly, AWS has a very strong margin profile. The operating profit margin of 36.8% over the past 12 months has increased from 33.4% in the previous year. And the second quarter took DIP, which is due to the timing of the stock-based compensation. Long-term trends indicate continuous improvement in margins.
Meanwhile, Amazon's retail business is becoming extremely profitable in itself. In the North American segment, operating margins rose to 7% in the last quarter, with international segment margins at 3.4%. The strong 11% top line growth supported by both was strengthened by a marginal ad revenue growth of 22%.
Long-term trends support stable revenue growth across Amazon's businesses, particularly strong, with high margin operations (i.e. AWS and advertising). As a result, revenues will be well above average.
And as spending growth on AWS slows, free cash flow should hit a new record by the end of the decade. This will increase the company's opportunities to invest in growth. Currently, stocks look attractive amid a slight pullback in prices.
Meta is another major Nvidia customer, but unlike Amazon, it uses only Nvidia chips for its own AI needs. In fact, it could be that they spend more on their AI needs than any other company in the world. And Meta's second quarter results are a clear example of why they are willing to spend so much.
Revenue rose 22% in the last quarter, with its operating margin expanding by 5% points. From some perspectives, it's faster revenue growth than both snap and Pinterest Despite being a much greater force in social media advertising. Meta's AI capabilities are a clear reason for out-of-performance.
Artificial intelligence has provided better recommendations for both advertising and organic content. As a result, the company was able to offer more ads and order higher pricing per ad impression. Meanwhile, the strong intake of generative AI tools for advertising creation makes it easier for marketers to create and test new ideas.
There are many other opportunities for AI to unlock. These include AI chatbots for WhatsApp and Messenger businesses, allowing you to increase your Facebook and Instagram click ads.
And management has said that the meta AI chatbot built into the app has 1 billion active users each month, giving it yet another surface to monetize with ads. Recently I started displaying ads on WhatsApp and threads. It should give room for demand to increase as demand increases, as its generative AI tools make advertising easier.
Finally, meta is at the forefront of developing augmented virtual reality. AI can unlock many values in an environment that recognizes its surroundings. The company has already seen strong early adoption of AI-incorporated metagrass.
The stock looks very attractive with a 16x positive estimate (EBITDA) of interest, taxes, depreciation and revenue before amortization. While data center depreciation weighs margins, the company has proven that its investments are rewarded with a very strong revenue growth rate and unlocking many potential profits in the long run.
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Adam Levy has positions at Amazon, Meta Platforms and Microsoft. Motley Fool features Advanced Micro Devices, Amazon, Meta Platforms, Microsoft, Nvidia, and Pinterest, and is recommended. Motley Fool recommends the following options: A $395 phone at Microsoft for January 2026 length and a $405 phone to Microsoft for January 2026 short term. Motley Fools have a disclosure policy.
Prediction: Two artificial intelligence (AI) stocks worth more than Nvidia by 2030 were originally published by The Motley Fool
