Deepwater Asset Management’s Gene Munster says Meta Platform Inc.’s (NASDAQ:META) plans to take a position as much as $65 billion this 12 months to expand its AI infrastructure will profit Nvidia Corp. (NASDAQ:NVDA) and other hardware players.
What Happened: Meta CEO Mark Zuckerberg on Friday outlined the corporate’s capital spending plans for 2025 and its give attention to artificial intelligence (AI).
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Zuckerberg expects Meta to allocate between $60 billion and $65 billion for capital spending, primarily geared toward expanding the corporate’s AI teams and constructing a latest data center. he described the brand new data center as being “so large that it will cover a major a part of Manhattan.” The tech mogul further noted that Meta goals to bring a gigawatt of computing power online by 2025 and is projected to complete the 12 months with over 1.3 million graphics processing units.
Weighing in on the announcement, Munster said Meta’s commitment “exceeds Street estimates of $51B.”
“In 2025, I expect Meta AI can be the leading assistant serving greater than 1 billion people, Llama 4 will develop into the leading cutting-edge model, and we’ll construct an AI engineer that can start contributing increasing amounts of code to our R&D efforts,” Zuckerberg said.
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In keeping with Munster, the increased investment in AI infrastructure will particularly profit Nvidia and other hardware players within the short term. In the long run, the upper capital expenditure (Capex) is anticipated to speed up the AI flywheel, resulting in more innovation, lower usage costs, a rise in customers, and consequently, more investment.
He also issued a reminder, stating, “I feel the market is going higher and the run will end in a spectacular bubble burst.”
Why It Matters: Zuckerberg’s announcement comes on the heels of Meta’s recent AI advancements. In December, Meta introduced the Llama 3.3 70B, a latest AI model that outperforms competitors like Alphabet Inc.‘s (NASDAQ:GOOGL) (NASDAQ:GOOG) Google, OpenAI, and Amazon.com, Inc. (NASDAQ:AMZN). This model offers the performance of Meta’s largest Llama model, Llama 3.1 405B, but at a reduced cost.