Veteran Fund Manager Sees Quiet Fuel for Next AI Rally

Microsoft’s next step is to increase its AI capacity by 80% this year while doubling its already impressive data center footprint within two years.

For Versace, all of these numbers point in the same direction.

“Each report says the same thing in different words: AI and cloud development is accelerating, not peaking,” he said. That rise bodes well for TheStreet’s chip holdings, including NVIDIA, wonderand Qualcomm.

• Capex is the new AI catalyst: Chris Versace believes big tech companies’ growing investment in infrastructure could fuel the next stage of the AI ​​rebound.

• Increased spending across the board: Alphabet, Meta and Microsoft are increasing their capital expenditures for 2025-2026, supported by combined AI and cloud outlays that are likely to reach $420 billion by 2026.

• Chip makers stand to gain: Versace points out Nvidia, Marvell and Qualcommwho will continue to be key beneficiaries of Big Tech’s arms race to increase data center capacity and artificial intelligence.

The biggest technology leaders are sending a clear message that the rise of AI is not just a phase, but rather a full-blown infrastructure race.

Throughout the third quarter earnings, three of the biggest tech giants: Alphabet, Microsoft, Meta and Amazon struck a confident tone, with their leaders acknowledging that demand for AI still outstrips supply and that they are spending whatever it takes to catch up.

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At Alphabet, CEO Sundar Pichai said Google is “investing to meet customer demand and capitalize on growing opportunities across the company.”

Google’s massive $23.95 billion in third-quarter capital spending, roughly 50% of its entire operating cash flow, is arguably its biggest spending increase yet. Additionally, Pichai cited “real business results” from AI, including record sales and growing adoption of Gemini tokens, while adding that Google continues to scale NVIDIA GPUs and its own TPUs to meet demand.

Microsoft’s Satya Nadella calls cloud and AI “the essential inputs for every business,” underscoring the tech giant’s push “across the stack,” from infrastructure to applications.

Additionally, Microsoft reported a whopping $21.4 billion in capital spending, with CFO Amy Hood noting that 50% of that high spending is on long-lived data center assets, which could generate returns for “more than 15 years.”

Meta’s Mark Zuckerberg perhaps took the most aggressive stance, noting that it is “the right strategy to anticipate capacity building,” even if there are short-term inefficiencies. Additionally, Meta’s capital spending in the third quarter amounted to $16.8 billion, a significant increase from $10.6 billion a year earlier, while its 2025 guidance has been revised to $70-72 billion.

At the same time, Amazon’s Andy Jassy hailed the moment as a “perhaps once-in-a-lifetime opportunity,” stating that the company added a magnificent 3.8 gigawatts of capacity last year.

However, Amazon’s free cash flow fell to $14.8 billion from $47.7 billion as it spent $50.9 billion on infrastructure, and capital spending is expected to exceed $125 billion.

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This story was originally reported by TheStreet on November 1, 2025, where it first appeared in the Technology section. Add TheStreet as a preferred source by clicking here.