Alphabet
’s

earnings showed that the Big Tech giant has been putting its hands deep in its pockets over the past quarter when it comes to pouring money into its cloud and artificial intelligence systems. For the three months ended June 30, the Big Tech giant had higher-than-expected capital expenditures of $13.2 billion, up more than 90% year over year.

That could be good news for Nvidia, which dominates the market for the graphics processing units (GPUs) needed to power AI large-language models.

But it’ll be tough for Nvidia investors to get carried away by the report, because Alphabet tempered expectations by sticking to—rather than raising—its spending guidance for the rest of 2024.

The earnings report “seems like a good read” for Nvidia, Ben Reitzes, head of tech research for the data analytics and investment firm Melius, said in a research note.

“There’s no 20% upside revision to [capital expenditure] this quarter—but it sure seems there could be upside to the outlook from here if management wants to see revenue upside from Cloud and AI Search,” he added.

Fellow chip maker

Advanced Micro Devices

fell 1.2% ahead of the opening bell, while

Broadcom

dropped 1.4%.

Texas Instruments

climbed 2.8% after its own quarterly earnings underlined its status as a potential haven among semiconductor stocks during a period of geopolitical turmoil.

Nvidia has racked up eye-popping returns this year, having soared 148% and even briefly overtaking

Microsoft

as the world’s most-valuable company last month. The benchmark

S&P 500

stock market index is up 16% in 2024, while the

Nasdaq Composite

has climbed 20%.

Write to George Glover at [email protected]