NVIDIA‘S (NVDA -5.12%) Shine seems to have faded. The stock is around 25% below its high of a few weeks ago. About a third of the LSEG In August, it is no longer recommended to buy Nvidia shares, a big change from July.

Some investors may think it’s time to move on to greener pastures. I suspect the opposite is true. Why is Nvidia still a buy after the sharp sell-off? Just ask Amazon (AMZN 0.52%)Google parent company alphabet (GOOG 0.13%) (GOOGL 0.41%), Microsoft (MSFT -0.29%)And Meta-platforms (META -1.05%).

Sing the same song

All four leading companies in the field of artificial intelligence (AI) sang the same song in their latest quarterly reports. And their tune should ring well with Nvidia shareholders.

Alphabet announced its second-quarter results on July 23. Chief Financial Officer Ruth Porat noted on the second-quarter conference call that the company’s capital expenditures were “predominantly driven by investments in our technology infrastructure, with servers accounting for the largest share, followed by data centers.” She added that capital expenditures in subsequent quarters this year would be at or above the $12 billion level of the first quarter.

When CEO Sundar Pichai was asked about the high investments in AI infrastructure, he replied: “The risk of underinvestment for us here is dramatically greater than the risk of overinvestment, even in scenarios where it turns out that we are overinvesting.”

Microsoft announced its fourth-quarter fiscal 2024 results on July 30. CFO Amy Hood said on the company’s conference call, “To meet growing demand for our AI and cloud projects, we will scale our infrastructure investments. Capital spending for fiscal 2025 is expected to be higher than in fiscal 2024.” About half of that spending will be on servers to support cloud and AI models.

The next day, Meta delivered its Q2 update. CFO Susan Li stated on the second-quarter conference call, “We currently expect significant growth in capital expenditures in 2025 as we invest in supporting our AI research and product development efforts.”

Amazon reported its second-quarter results on August 1. In the company’s conference call, CFO Brian Olsavsky said, “We expect higher capital investments in the second half of the year.” He added, “The majority of the spending will be used to support growing AWS infrastructure needs as we continue to see strong demand for both generative AI and our non-generative AI workloads.”

Great news for Nvidia

Alphabet, Microsoft, Meta and Amazon plan to continue investing heavily in AI-related infrastructure. This is great news for Nvidia because it almost certainly means higher revenues for its graphics processing units (GPUs).

Sure, these big companies use their own AI chips to some extent. Google has its custom AI accelerator, Trillium. Microsoft has Azure Maia. Meta’s custom AI chip is MTIA (which stands for Meta Training and Inference Accelerator). Amazon highlighted its Trainium and Inferentia chips in its second-quarter earnings call.

But make no mistake: These AI giants rely heavily on Nvidia. That’s not going to change anytime soon. It’s possible that their dependence on Nvidia will soon increase. Nvidia’s Blackwell GPU architecture is far better than anything else on the market. Amazon, Alphabet, Microsoft and Meta are expected to be among the first companies to receive the new Blackwell-based chips when they ship.

Nvidia CEO Jensen Huang has high hopes for Blackwell. He predicts it could be the “most successful product” in the company’s history. I suspect he will be right – and Amazon, Alphabet, Microsoft and Meta will help make it happen.

What about the reported delay at Blackwell?

Some investors may be concerned about the report. The information of a delay in the delivery of Blackwell chips due to a design flaw. Nvidia has not commented on the rumor, other than confirming that it expects production of the new chips to ramp up in the second half of 2024.

I’m not sure if the report is true, but it could be. In Nvidia’s quarterly update in May, CFO Colette Kress said the company is working to make Blackwell available to global partners “later this year.” However, in Alphabet’s Q2 call, Pichai noted that “the latest Nvidia Blackwell platform will come to Google Cloud in early 2025.”

But any delay from Blackwell should only be a temporary problem for Nvidia. The overall outlook for the company should not change. And if you listen closely to what Amazon, Alphabet, Microsoft and Meta are saying, that outlook should remain very good.