We recently compiled a list of the 10 AI News You Shouldn't Miss. In this article, we are going to take a look at where Apple Inc. (NASDAQ:AAPL) stands against the other AI stocks you shouldn't miss.
John Lovelock, Chief of Research for Global IT Forecasting at Gartner, joined CNBC's Worldwide Exchange to discuss the major catalyst for IT spending in 2025: Generative AI. He states that companies are now moving from cost-saving optimizations and any upgrading they have been focused on for the past eighteen months, with growth back on their agenda. For 2025, "they are shifting back to growth", he says, emphasizing the need for GenAI to boost revenue expansion.
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Lovelock further elaborates that most of the growth in GenAI spending this year and next year is in the tech sector. All the big-tech companies are building the AI infrastructure needed for GenAI, whereas software companies are spending to incorporate GenAI in their products and services. The biggest area of growth next year, however, is data centers, projected to grow over 15%. When asked if this is a slowdown from the previous year's 35% growth, he remarked that the denominator is getting "awfully big".
Enterprises, banks, governments, retailers, and everyone else are building up or buying AI-optimized servers. However, the biggest purchasers are still the hyperscalers. The massive amount of money they are going to be spending will surpass all of the money Big Tech companies have previously spent on CPU servers from 2000 to 2026. While the net increase continues, the sheer spending of the hyperscalers is keeping the growth rate down, Lovelock notes.
New estimates from Morgan Stanley reinstate the same, with four of the Big Tech companies expected to invest about $300 billion in capital expenditures next year, and 2026 is expected to be even bigger. The bank notes that much of the CapEx is focused on hyperscalers. These hyperscalers, with their extensive cloud networks, are in a significant multi-year investment cycle driven by the pursuit of opportunities in generative AI and large language models.
"These high and rising CapEx numbers again speak to the importance of continued disclosure about new/incremental adoption, engagement, and revenue opportunities each of the four companies are seeing and investing in".
The Latest Developments in AI
In recent AI news, we've seen prominent announcements from companies unveiling breakthroughs in large language models, AI hardware, and partnerships that aim to incorporate AI more deeply into core business functions. On November 5, CNBC reported that Perplexity AI, the artificial intelligence startup, is in the final stages of raising $500 million in funding at a $9 billion valuation. The company has been gaining significant investor attention due to the generative AI boom.