Oppenheimer Projects Tech Giants' AI Spending to Reach $1.3 Trillion by 2027
Oppenheimer projects tech giants' AI capital expenditures will reach $1.3 trillion by 2027, boosting chipmakers like Nvidia and Broadcom while consumer electronics face steep declines.
Oppenheimer Forecasts Massive AI Infrastructure Growth
Investment bank Oppenheimer estimates that the majority of semiconductor companies will enjoy positive momentum, driven primarily by the surging demand for artificial intelligence (AI) infrastructure. However, the bank distinguishes between companies benefiting from data center investments and manufacturers of components for smartphones and personal computers, which face more challenging conditions.
In a review published on October 15, analysts Rick Schafer and Trevor Williams estimate that capital expenditures by four tech giants—Google, Amazon, Microsoft, and Meta—will total more than $710 billion in 2026 and skyrocket to about $1.3 trillion in 2027, compared to $375 billion in 2025.
Top Chip Picks and Growth Drivers
One of the main beneficiaries of continued investment is expected to be Nvidia (NVDA). Oppenheimer reiterates its Outperform rating for the stock, with a price target of $315, reflecting an upside of about 42% compared to the price of $221.30 on October 15.
"Nvidia continues to lead the AI accelerator market thanks to its technological advantage and rapid pace of new product launches," Oppenheimer analysts noted.
Broadcom (AVGO) also receives an Outperform rating with a price target of $535—an upside of about 55%. Oppenheimer projects that the company's AI-related revenues will grow from $58 billion in fiscal 2026 to $124 billion the following year. Meanwhile, Marvell Technology (MRVL) boasts an even higher projected upside of approximately 73%, with a price target of $425.
Divergence in the Semiconductor Sector
Not all semiconductor companies are participating in the rally. Alongside optimistic forecasts for AI infrastructure, Oppenheimer warns of weakness in the personal computer and smartphone markets. According to the review, NAND memory prices have risen by about 300% this year, hurting cheap devices and mid-tier market segments.
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Smartphone unit sales are estimated to drop by about 15% this year.
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Personal computer sales are projected to decline by about 10%.
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Next year, smartphone sales may fall by another 5%, while the PC market is expected to stagnate or contract.
Oppenheimer believes that selective stock picking, rather than broad exposure to the entire sector, will be especially critical in the near term.
