Magnificent Seven capex surge to exceed $750 billion in 2026, boosting Nvidia and Sandisk
Alphabet, Amazon, Microsoft, and Meta lead a 77 per cent rise in capital expenditure, creating tailwinds for semiconductor suppliers as Nvidia reports strong quarterly growth.
The Magnificent Seven technology conglomerates are projected to invest more than $750 billion in capital expenditure during 2026 to expand artificial intelligence infrastructure. Alphabet, Amazon, Microsoft, and Meta are expected to contribute a collective $725 billion, marking a 77 per cent increase from the previous year. Tesla’s capital spending is forecast to exceed $25 billion, while Apple has recorded $4.3 billion in recent quarters.
This surge in spending is driving substantial demand for Nvidia’s Vera Rubin AI processors and Sandisk’s NAND flash storage solutions. Nvidia reported 85 per cent year-on-year revenue growth in the first quarter of fiscal 2027, with analysts predicting an 88 per cent increase in earnings per share for the fiscal year. Concurrently, Sandisk is benefiting from surging demand for enterprise solid-state drives, with McKinsey estimating a 35 per cent annual growth in sales through 2030.
Nvidia’s chip systems form the cornerstone of the AI infrastructure being built by major hyperscalers. The company noted that its next-generation Vera Rubin AI processors will be deployed widely by the top four hyperscalers in the U.S., alongside strong demand from pure-play AI companies such as OpenAI and Anthropic. Analysts estimate Nvidia’s revenue for the current quarter at $91 billion, implying a 95 per cent year-on-year increase.
Sandisk is trading at 22 times forward earnings, with its bottom line growing exponentially due to demand for NAND flash storage exceeding supply. The AI boom is expected to ensure that storage demand continues to grow at an exceptional pace, with the AI-focused storage market’s revenue potentially increasing from $36 billion last year to almost $322 billion in 2035.
McKinsey estimates a 35 per cent annual growth in sales of enterprise solid-state drives through 2030, driven by AI training and inference needs. The consulting firm notes that AI training needs will drive an 11-fold increase in SSD content per server between 2024 and 2030, while AI inference will drive a seven-fold jump in the same.
While Nvidia is anticipated to deliver healthy double-digit earnings growth over the next three years, Sandisk’s growth is outpacing Nvidia’s significantly. If both companies were to trade at an identical 30 times forward earnings after three years, Sandisk’s stock price upside would be much higher, making it an attractive investment for those seeking multibagger gains in the long run.
The Motley Fool’s Stock Advisor analyst team recently identified 10 best stocks to buy, but Sandisk was not included in the latest list. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla.
