Great News for Nvidia, Micron, Broadcom, and AMD Stock Investors -- Wall Street Made a Mistake

Detailed summary

Technology companies are investing in AI infrastructure much more aggressively than Wall Street analysts forecast earlier this year.

The semiconductor stocks listed below have created significant wealth for shareholders. The percentage next to each name quantifies the share price appreciation since January 2023.

All four stocks trade below their highs -- AMD is down 20%, Broadcom and Nvidia are down 30%, and Micron is down 40% -- but there is some good news for shareholders. AI spending will be much higher than Wall Street expected in 2026, and the same outcome is probable in 2027.

Missed AI's "Act 1"? Act 2 Could Be 16x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we're only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »

Wall Street analysts have consistently underestimated how much technology companies will spend on artificial intelligence infrastructure. According to JPMorgan Chase chief U.S. economist Michael Feroli, "The surge in AI -related expenditures has been the defining feature of our economic times."

In January, the consensus estimate said capital expenditures (capex) among the five largest hyperscalers -- Alphabet, Amazon, Meta Platforms, Microsoft, and Oracle -- would total $546 billion this year. But Wall Street now expects those companies to spend $800 billion in 2026, nearly double what they invested last year,

Similarly, the Wall Street consensus initially put capex spending at $630 billion in 2027, but that forecast has since been upwardly revised to $1.1 trillion. And Morgan Stanley expects spending to approach $1.6 trillion next year if CoreWeave, Nebius, and Space Exploration Technologies are included in the math.

So what? Wall Street analysts have dramatically raised their forecasts for AI infrastructure spending. Since January, the consensus capex forecasts for the top five hyperscalers have increased 50% for 2026 and 75% for 2027. Those are not minor revisions. They are major changes that reflect extraordinary demand.

Wall Street has now substantially underestimated…

Mic…

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