September 20, 2025

finance  
Amazon AI Boosts AWS, Google Cloud Grows, Microsoft Invests

The artificial intelligence sector is experiencing a significant surge in spending, with Morgan Stanley predicting a more than 600% increase among software and internet companies by 2028. Amazon is a key player, leveraging AI to enhance its cloud services, particularly through AWS, and to optimize its vast retail operations, including logistics and advertising. Alphabet is also seeing AI boost its search engine and Google Cloud business, with features like AI Overviews driving engagement. Microsoft is capitalizing on its strategic investment in OpenAI and integrating AI across its Azure cloud services and productivity tools. Nvidia continues to lead AI infrastructure with its GPUs and CUDA platform, though its stock is facing some investor scrutiny as its growth rate slows and market capitalization reaches $4 trillion. Nvidia has also made strategic moves, including a $900 million deal to acquire the CEO and employees of AI startup Enfabrica and a significant investment in the UK's AI sector. Other companies like HubSpot are seeing success with their AI platforms, such as Breeze, contributing to strong financial results. Palantir has secured a major $1 billion deal with the U.K. Ministry of Defence for its AI systems and plans to invest up to $2 billion in the UK. Meanwhile, SoundHound AI, a conversational AI specialist, faces challenges despite revenue growth due to significant losses and a high valuation. Constellation Software is navigating AI's dual role as both an opportunity and a threat to its diverse software businesses, while DoubleVerify is poised to benefit from AI-driven advertising growth.

Key Takeaways

  • Morgan Stanley forecasts AI spending by software and internet companies to increase by over 600% in the next three years.
  • Amazon is utilizing AI to boost cloud services revenue (AWS) and improve retail operations efficiency.
  • Alphabet's AI advancements are enhancing its search engine and Google Cloud, contributing to revenue and profit increases.
  • Microsoft is experiencing substantial growth through its investment in OpenAI and AI integration into Azure and productivity suite.
  • Nvidia remains a dominant force in AI infrastructure with its GPUs and CUDA platform, despite recent stock scrutiny.
  • Nvidia acquired the CEO and employees of AI startup Enfabrica for over $900 million to bolster its AI capabilities.
  • Palantir secured a potential $1 billion deal with the U.K. Ministry of Defence for its AI systems and pledged $2 billion in UK investment.
  • HubSpot's AI platform, Breeze, has contributed to strong second-quarter financial results.
  • Analysts view Amazon and HubSpot stocks as currently undervalued with significant upside potential.
  • SoundHound AI faces stock challenges despite revenue growth due to significant losses and a high valuation.

Morgan Stanley predicts AI spending to surge 600%

Morgan Stanley forecasts that AI spending by software and internet companies will increase by over 600% in the next three years. Amazon is using AI to boost its cloud services revenue and make its retail operations more efficient. HubSpot's second-quarter results were strong, partly due to the successful adoption of its AI platform, Breeze. Analysts see potential upside in both Amazon and HubSpot stocks, suggesting they are currently undervalued.

AI spending to jump 600% as Amazon and HubSpot lead the way

Morgan Stanley predicts a more than 600% increase in AI spending by software and internet companies by 2028. Amazon is leveraging AI to enhance its cloud services and retail efficiency, while HubSpot's AI platform, Breeze, contributed to its strong second-quarter financial results. Analysts believe both Amazon and HubSpot stocks are undervalued, with significant upside potential. Amazon uses AI for retail optimization and cloud services, while HubSpot's AI features simplify CRM tasks.

Wall Street sees AI spending surge 600% with Amazon and HubSpot

Morgan Stanley projects a more than 600% rise in AI spending among software and internet companies by 2028. Amazon is utilizing AI to improve its cloud services and retail operations, while HubSpot's AI platform, Breeze, has boosted its recent financial performance. Analysts suggest that both Amazon and HubSpot stocks are currently undervalued and offer significant investment potential. Amazon employs AI across its e-commerce, cloud, and retail sectors, and HubSpot's AI tools streamline customer relationship management.

Nvidia's UK AI Investment Sparks Analyst Interest

Nvidia is making a significant investment in the UK's artificial intelligence sector. While the exact details of the investment are not fully disclosed, it is expected to bolster AI development and infrastructure in the region. Analysts are closely watching Nvidia's strategic moves in the UK, anticipating potential impacts on the company's growth and market position in the AI landscape. The investment underscores the global importance of AI and Nvidia's role in advancing the technology.

Top AI Stocks: Nvidia, Alphabet, and Amazon Lead the Pack

Nvidia continues to dominate AI infrastructure with its GPUs and CUDA software, maintaining over 90% market share. Alphabet's AI advancements are boosting its search and cloud businesses, with features like AI Overviews driving engagement and Google Cloud revenue soaring. Amazon is integrating AI across its operations, particularly in AWS, to enhance efficiency and drive growth in both cloud services and e-commerce. These three companies are considered strong buys for investors looking to capitalize on the AI boom.

Three AI Stocks Poised for Growth: Nvidia, Alphabet, Microsoft

Nvidia remains a leader in AI infrastructure due to its GPUs and CUDA platform, with strong growth in its data center networking business. Alphabet is benefiting from AI integration in its search engine and Google Cloud, with significant revenue and profit increases. Microsoft's strategic investment in OpenAI and integration of AI into its Azure cloud services and productivity suite are driving substantial growth. These companies are well-positioned to capitalize on the expanding AI market.

Nvidia Stock Tests Key Support Amid Growth Concerns

Nvidia, a major player in artificial intelligence, is facing investor scrutiny as its growth rate slows and its market capitalization reaches $4 trillion. The stock has recently moved off the IBD 50 list, indicating potential challenges. Nvidia is testing its 50-day moving average, a key technical indicator. Investors are watching to see if the company can maintain its momentum and convince the market of its continued potential in the AI sector.

Nvidia Spends $900 Million on AI Startup Enfabrica

Nvidia has acquired the CEO and employees of AI startup Enfabrica, along with licensing its technology, in a deal worth over $900 million. This move, similar to talent acquisitions by Meta and Google, aims to bolster Nvidia's AI capabilities. Enfabrica's technology focuses on connecting large numbers of GPUs, potentially allowing Nvidia to offer more integrated AI systems. Nvidia previously invested in Enfabrica in 2023 and has been actively involved in acquiring AI talent and technology.

SoundHound AI Stock Faces Challenges Despite Revenue Growth

SoundHound AI, a conversational AI specialist, has seen its stock decline 27% in 2025, despite nearly doubling its revenue this year. The company's valuation remains high, even exceeding Nvidia's in some metrics. Nvidia's previous stake sale in SoundHound raised concerns. While demand for conversational AI is strong, with applications in hospitality, automotive, and finance, SoundHound's significant losses and projected slower growth in 2026 could hinder future stock performance. The company's cash reserves may also necessitate future capital raises.

Amazon and Upstart: AI Stocks for Growth

Amazon is leveraging AI across its e-commerce and cloud services, with AWS playing a crucial role in supporting AI functions for clients. The company's AI integration is driving efficiency in logistics and advertising. Upstart Holdings uses AI to transform loan evaluation, approving a high percentage of applications without human intervention. With the Federal Reserve lowering interest rates, Upstart is poised for growth in personal, auto, and home equity loans. Both stocks are considered attractive investments due to their AI-driven potential.

Constellation Software Navigates AI Opportunity and Threat

Constellation Software Inc. is addressing investor concerns about artificial intelligence potentially disrupting its diverse portfolio of niche software businesses. While AI presents opportunities for efficiency and potential acquisitions, it also poses a threat if customers develop their own software or if competition intensifies. The company, which owns over 2,000 businesses, believes its deep industry expertise and entrenched customer relationships provide a competitive moat. Constellation is hosting a webcast to discuss AI's impact and its strategy for navigating this evolving landscape.

Amazon Stock: A Strong AI Investment Beyond Nvidia

Amazon is presented as a strong AI investment, offering value beyond AI leaders like Nvidia. The company's cloud computing arm, AWS, is essential for AI development, and its generative AI tools are expanding. Amazon is also integrating AI into its vast e-commerce operations, improving logistics and robotics. With a reasonable price-to-earnings ratio and significant profit growth, Amazon is well-positioned to benefit from the ongoing AI revolution, including advancements in robotics and autonomous systems.

DoubleVerify Earns Outperform Rating Amid AI Ad Growth

BMO Capital maintains an Outperform rating on DoubleVerify (DV), citing its strong execution and product pipeline, which is expected to drive faster growth in 2026. The company's Media Authentication Platform (MAP) delivers high gross margins and is well-positioned to benefit from emerging AI-driven advertising categories. DoubleVerify's business model helps mitigate concerns about AI impacting ad pricing. The analyst expects social media and connected TV to further accelerate revenue growth.

Palantir Secures Major UK Defense Deal Valued at $1 Billion

Palantir is set to sign a significant agreement with the U.K. Ministry of Defence, potentially worth up to $1 billion, involving its AI systems for military data analysis. This deal underscores the growing role of AI in national defense and includes a pledge from Palantir to invest up to $2 billion in the U.K. over five years. The company's Artificial Intelligence Platform (AIP) is key to its success in both government and enterprise sectors, driving substantial revenue growth and stock appreciation.

Sources

AI Spending Amazon HubSpot Nvidia Alphabet Microsoft Palantir SoundHound AI Upstart DoubleVerify Constellation Software Artificial Intelligence Machine Learning Cloud Computing Generative AI AI Infrastructure GPUs Software Investment Stock Market Defense Technology Robotics Autonomous Systems Conversational AI CRM Advertising Technology Data Analysis UK Investment