Alphabet CEO Sundar Pichai Just Made a $200 Billion Infrastructure Move. Nvidia, Micron, and Broadcom Investors Should Rejoice.

Nvidia and Broadcom could be selling more computing units to Alphabet.

Soaring memory chip prices caused another AI hyperscaler to boost its guidance as well.

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is the largest AI hyperscaler, sitting at a $4.35 trillion market cap. It is a major player in the AI realm, as it has a dominant cloud computing service and is also competing with its own family of large language models. The decisions that it makes influence the entire industry, and several equipment providers in the AI industry are thrilled about Alphabet's latest announcement.

During Alphabet's Q2 earnings release, it increased its capital expenditure guidance range from $180 billion-$190 billion all the way up to $195 billion-$205 billion. That's a huge bump from CEO Sundar Pichai and his team at Alphabet, but if demand is there, then this increase makes a ton of sense. There are several companies slated to benefit from this rise, but chief among them are Nvidia (NASDAQ: NVDA) , Micron (NASDAQ: MU) , and Broadcom (NASDAQ: AVGO) . This trio is thrilled about rising spending, and they make for great investments now.

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Nvidia and Broadcom are two of the primary beneficiaries of this announcement. Each of them supplies Alphabet with computing units, and an increase in spending is music to their ears. Nvidia makes broad-purpose GPUs that are the gold standard in accelerated computing. Every product is compared to Nvidia's flagship units, and Alphabet has always been a major customer, using Nvidia's GPUs for internal computing purposes as well as renting them out through Google Cloud.

However, Alphabet has to pay Nvidia quite a lot for its GPUs, so it has also worked with Broadcom to develop custom AI computing units that can rival Nvidia's products. These custom AI chips are the reason why Alphabet has become the fastest-growing cloud computing business, and they're so popular that external clients are starting to buy them from Alphabet.

Regardless, when Alphabet states that it is increasing its capital expenditure guidance, Nvidia and Broadcom investors have reason to celebrate. Still, the market isn't as bullish on these two as it once was.