Amazon (NASDAQ:AMZN) reported earnings last week and investors weren’t exactly thrilled. Although the e-commerce giant’s performance in the fourth quarter was solid, its first-quarter guidance overshadowed those results.

It was the same with Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL), too, though investor disappointment centered around lower than expected cloud revenue.

Despite the market’s reaction to the twin earnings reports, with AMZN stock dropping 4% and GOOG stock tumbling 11% afterwards, investors in Nvidia (NASDAQ:NVDA) should be elated. 

The chipmaker’s stock was already recovering from the DeepSeek shock last month, but since the earnings announcements from Amazon and Alphabet, NVDA shares are up 11%. Investors have these tech behemoths to thank, in part, for the boost.

AI spending to accelerate

Amazon CEO Andy Jassey told analysts on the earnings conference call his company would be spending over $100 billion in capital expenditures in fiscal 2025, over $20 billion more than what it spent last year. 

The majority of that spending will be going into Amazon Web Services’ artificial intelligence infrastructure because “AI represents, for sure, the biggest opportunity since cloud, and probably the biggest technology shift and opportunity in business since the Internet.”

Similarly, Alphabet’s  CFO Anat Ashkenazi said that the tech giant would also be spending big on AI this year. It plans for $75 billion in capex spending, also a $20 billion or so increase year-over-year, with much of that going into AI.

Naturally, Nvidia has become the face of the AI revolution since ChatGPT was released in November 2022, and capital spending on AI will certainly benefit the chipmaker, but it is more than these increased expenditures that should have investors excited.

Storm clouds gathering on the horizon

As most understand, Nvidia does face some headwinds beyond what the DeepSeek reveal potentially means to chip sales and margins.

Nvidia’s next-generation Blackwell accelerators are due out and the chipmaker is still apparently having overheating issues with them. It reportedly caused a number of customers to pause their purchases or opt for other alternatives. 

Notably, ChatGPT’s OpenAI told Microsoft (NASDAQ:MSFT) to provide it with Nvidia’s older Hopper chips because of the delays. Amazon and Alphabet also are said to have cut some orders for the Blackwell accelerators.

It is facing increased competition from Advanced Micro Devices (NASDAQ:AMD) for its newest AI chips and its customers are pursuing their own accelerators to break their reliance upon Nvidia.

Amazon has developed its Tranium chip and in December announced a five-year pact with Marvell Technology (NASDAQ:MRVL) for a “multi-generational” agreement covering AWS and cloud infrastructure. Marvell will supply AWS with a broad selection of data center semiconductors, not least of which will be Amazon’s Trainium2.0 custom AI ASIC.

Alphabet’s Tensor Processing Unit (TPU) are perfect for AI applications as they are optimized for high-volume, low-precision calculations with enhanced input and output capabilities. Last summer, Apple (NASDAQ:AAPL) announced it had used the TPUs to develop AI models.

On top of that, trade relations between the U.S. and China are giving it headaches, too, as tit-for-tat tariffs weaken Nvidia’s exposure to its largest equipment market. The stock was due for some good news.

Soothing sounds to hear

Nvidia investors heard Amazon’s Jassey tell analysts, “Chips are a key ingredient in the compute that drives training and inference. Most AI compute has been driven by Nvidia chips, and we obviously have a deep partnership with Nvidia and will for as long as we can see into the future.”

Alphabet’s CEO Sundar Pichai had already endorsed its ongoing relationship with Nvidia, noting, “We also continue our strong relationship with Nvidia. We recently delivered their H100-based platforms to customers. And just last week, we were the first to announce a customer running on the highly anticipated Blackwell platform.”

Amid all the talk of losing sales and profits due to DeepSeek, or issues with Blackwell cutting into growth, two of Nvidia’s biggest customers threw cold water on the prospect. They are happy with what they’re getting out of the chipmaker, will continue buying from it, and actually want more.

With all the money Amazon and Alphabet will be pouring into AI this year and beyond, it should clear up any doubts investors may have had about Nvidia continuing on its current growth trajectory. 

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