$615 Billion: Inside the AI Spending Spree Behind 3 'Strong Buy' Stocks!

three companies over $600 billion dollar. That is how much Microsoft, Amazon, and Google are spending on AI this year alone. More than the GDP of most countries. And the wild thing is that number has been raised multiple times already this year. Today, we are breaking down where all that money is going. So, let's get into it. All right, guys. Welcome back. Thank you all so much for being here. Today, we are breaking down three of the biggest corporate AI spenders in history. Microsoft, Google, and Amazon. Together, they're projected to spend 615 billion on AI infrastructure in 2026 alone. What's remarkable isn't just the size of that number. It's that each of these companies, in their own words, has said that they still can't build fast enough to keep up with demand. This isn't just speculative hype spending anymore. It is a capacity scramble. So, today we're taking a look at each of these tech behemoths and what their AI spending plans are, plus how Wall Street analysts weigh in on the company. You can follow along over on the Tip Ranks website or right on the Tip Ranks mobile app. And if you enjoy today's video, make sure you hit that thumbs up button and that you subscribe to the channel. TipS is also having our summer sale with 70% off premium subscriptions. So, if you want to unlock some premium research tools, now is the time to do so. Links will be pinned in the comments below. Now, let's dive right in. We're going to start off with the biggest spender of the group, Amazon. Trading under the ticker AMZN, they're currently priced at $261. In the past year, their stock is up over 14% and is up fractionally in the last 3 months. Amazon raised their capex guidance for 2026 to 220 billion, up from a previous 200 billion guide. Most of that money funds AWS data centers, the long game infrastructure that takes about 2 years to come online but runs productively for 30 plus years after that. They are also pouring money into their own AI chip, Tranium, which both Anthropic and Open AAI have committed to using. AWS's backlog has hit 496 billion with tripledigit growth. And their CEO Andy Jasse put it bluntly, quoting, "We will still not have enough capacity to meet all of the demand we have in 2026." And he expects that to still be true in 2027. Amazon just shared their Q2 earnings report at the end of July, coming out with an earnings and revenue beat. Earnings per share came in at $5.75, well ahead of expectations, and revenue of 200.6. 6 billion beat by over 3.5 billion and grew over 19% year-over-year. The company saw AWS revenue of 42.2 billion up over 36% year-over-year and their fifth straight quarter of accelerating growth and their AI revenue run rate was over $25 billion. Of course, there is no shortage of analyst coverage on these big tech names. And just yesterday, we heard from one at Morgan Stanley. They said that Amazon's AWS could reach 1 trillion in revenue over the next 8 to 10 years, creating a path towards 500 billion dollars of companywide EBIT and a $500 share price by the end of 2027. With 39 current analyst ratings, Amazon nearly comes in as a unanimous strong buy with 38 buys and one hold. The average price target is $333 for an upside potential of 27.5%. And there are far too many ratings to scroll through all of them, but looking at the most recent here, we can see they range from an upside of 15% up to 43%. Next up is Microsoft. They trade under the ticker MSFT, currently priced at $481. In the past year, their stock is actually down nearly 6%, but in the last 3 months has been gaining and is up 15%. Microsoft plans on spending 190 billion. And one stat about that that surprises people is more than 60% of that is going towards power, cooling, and physical data center construction, not chips. Microsoft's own CFO has said power availability, not chip supply, is the real bottleneck holding back Azer's growth right now, and has said the company expects to remain capacity constrained through at least 2026. On the hardware side, Microsoft runs a hybrid setup, Nvidia's GPUs, alongside its own custom Maya silicon. But the real headline number here is the Open AI relationship. A $250 billion incremental commitment to Azure services signed in October of 2025 on top of everything OpenAI was already spending. Azura's AI business alone is now running at 37 billion annualized paste, up 123% year-over-year. Microsoft came out with strong quarterly and year-end results at the end of July. Q4 earnings per share beat by 50 cents, while revenue climbed nearly 18% to 90 billion, beating estimates by nearly 2.4 billion. The company saw their annual revenue surpass 331 billion, up 18% year-over-year. And the company added 31 new data centers across five continents this quarter. Earlier in August, an analyst at Goldman Sachs added Microsoft to their US conviction list, saying that they believe Microsoft has an ideal position as AI moves from a trade focused on training and infrastructure to the early stages of how to make AI work in enterprise. With 34 analyst ratings, Microsoft also nearly comes in as a unanimous strong buy with 33 buys and one hold. The average price target is $564, implying an upside potential of 17%. And looking at some of those most recent analyst ratings, our price targets range from an upside of 3.8% up to 45%. And finally, we're taking a look at Google parent company Alphabet. They trade under the ticker GGL, currently priced at $343. In the past year, they've gained over 70% but are in the red more recently, down 11% in the last 3 months. They are looking to spend $25 billion and that number has been raised twice already this year. About 60% goes to servers, GPUs, and CPUs, and the other 40% to data center construction and networking. The standout here is Google's custom TPU chip. Now on its seventh generation, codenamed Ironwood, which powers its Gemini AI models. Google's cloud backlog has swelled to 514 billion, and their CEO has said roughly 90% of the Fortune 100 now uses Google's Gemini Enterprise product. Their CEO was very candid about demand outrunning supply, telling analysts earlier this year that their cloud revenue would have been higher if they were able to meet the demand. And on July 22nd, they did come out with an earnings and revenue beat for their Q1. Earnings per share of $911 was far ahead of expectations and revenue climbed to 119.69 billion, beating by 3.24 billion and growing about 24% year-over-year. The company saw their cloud revenue grow 82% year-over-year to 24.8 billion and their search and other revenues grew by 17%. Shortly after that earnings report, we did have an analyst at Philip Securities upgrade their rating on the Alphabet stock to a buy. They noted the company's robust revenue growth across its core business segments and that they remain constructive on Alphabet's long-term outlook, saying its vertically integrated AI ecosystem should continue to support robust growth across both ad and cloud businesses. The Alphabet stock has 30 current analyst ratings and comes in as a strong buy with 25 buys and five holds. Analysts average price target is $422 for an upside potential of nearly 23%. And looking at those most recent ratings, they range from an upside of nearly 15% up to nearly 30%. So there it is, $615 billion across just three companies. All of them saying it might just not be enough. Let me know in the comments down below which of these three stocks you think will be the biggest AI beneficiary. I always love hearing from you guys. And keep in mind, these videos are never suggestion to buy or sell any specific stock. So, always do your own research and due diligence. Thanks so much for watching. Have a fantastic day. I'll see you back here next time.