Wall Street analyst designates Nvidia and Broadcom as premier semiconductor picks for AI infrastructure leadership.

Ahead of earnings, BofA Securities analyst Vivek Arya's consensus tracker indicates that first-quarter global hyper-scale capex will be $93.8 billion, up 71% year-over-year. For calendar years 2025 and 2026, capex is projected at $402 billion and $429 billion, respectively, approximately 4% and 7% higher than the prior outlook. Arya highlighted increasing concerns that AI data center buildouts might peak in 2025 and then considerably slow down afterward.

However, Arya emphasized that capex from non-CSPs, including emerging cloud vendors, enterprises, and national AI infrastructure projects, could be an additional source of sustaining AI investments, filling any potential demand gap. Overall, Arya continues to view the demand for AI computing as healthy, noting that the ongoing shift toward compute-hungry test-time computing and reasoning models should further help support demand.

According to Arya, the reports about Microsoft canceling new data center leases and Amazon pausing certain discussions on leases are notable. The analyst explained that Microsoft's actions may be tied to OpenAI strengthening its connections with other cloud providers, while Amazon's moves could be linked to forthcoming AI Diffusion rules and may align with their broader onshoring strategies. Meanwhile, Meta and Google recently reaffirmed their 2025 capex guides. Overall, Arya noted that AI demand is simply shifting between vendors rather than disappearing.

Datacenter remains one of few bright spots in first-quarter semiconductor earnings, with four major U.S. hyperscalers—Alphabet Inc., Microsoft Corp., Meta Platforms Inc., and Amazon.Com Inc.—set to report in the coming weeks. In price action, NVDA stock is up 3.4% at $102.25, while AVGO is up 3.8% at $176.15.