Nvidia (NVDA +1.44%) has been a rock-solid investment option over the past few years, thanks to the tech sector’s soaring capital expenditures for data center infrastructure. Hyperscalers have set year after year of records with their spending, and 2027 could be another one for the record books.
As long as data center capital expenditures continue to rise, Nvidia will be an excellent investment — and investors recently got good news from two different sources regarding this trend.
Image source: Getty Images.
2027 could bring $1 trillion in capital expenditures
For 2026, the big four AI hyperscalers made headlines by announcing a total of $650 billion in capital expenditure plans. That figure has ticked up a bit over the first half of the year as some have expanded their build-out plans. But for 2027, it could rise to $1 trillion, according to Nvidia. That would be a major increase, and Nvidia’s information is likely pretty trustworthy, because it’s doubtless receiving orders for next year already. Data centers take time to construct, and the companies that operate them want to be able to place computing units inside them as soon as possible. With data center GPUs still in a supply shortage, big customers need to place these orders well in advance to get their processors close to when they hope to.
Today’s Change
(1.44%) $3.09
Current Price
$217.59
Key Data Points
Market Cap
$5.2T
Day’s Range
$210.97 – $218.29
52wk Range
$138.83 – $236.54
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3.3M
Avg Vol
166.6M
Gross Margin
74.15%
Dividend Yield
0.02%
Nvidia isn’t the only one making such bold projections about growing demand next year, either. On Alphabet‘s (GOOG +3.58%) (GOOGL +3.42%) first-quarter earnings call, management said that investors should expect “significant expansion” in capital expenditures during 2027. That’s a company that’s actually spending the money to build out its data center footprint.
However, that’s not the only form of growth investors can expect from Nvidia. While Nvidia will receive a boost in raw spending among its top clients, it is also rolling out the new Vera Rubin platform later this year. This platform has many improvements over its prior-generation Blackwell chips, and its prices will increase commensurately. With Nvidia able to boost its unit prices in an environment of greater total spending, its revenue should grow at a healthy pace in 2027, which bodes well for the stock price.
2027 may not be the end, either. Nvidia projects that global data center capital expenditures will rise to between $3 trillion and $4 trillion annually by 2030. That’s an even bolder prediction, but if that pans out, Nvidia will continue to be one of the best stocks in America to invest in. And regardless of whether that longer-term projection comes to pass, Nvidia should prove a great pick for most investors.
Keithen Drury has positions in Alphabet and Nvidia. The Motley Fool has positions in and recommends Alphabet and Nvidia. The Motley Fool has a disclosure policy.
