Big Tech Is About to Report. Nvidia Investors Should Watch One Number.

Investors have focused heavily on technology giants in recent years as these companies are driving the artificial intelligence (AI) revolution. They are the ones spending on the infrastructure build-out, or developing and providing the products and services needed to advance the AI story.

And as a result, this week, with big tech set to report earnings, should be a big one for investors. Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) kick things off with quarterly updates on Oct. 28 after the closing bell, and Amazon's (NASDAQ:AMZN) report is scheduled for Oct. 29 after the close of trading.

These reports should be important for the entire market, considering that AI has set the tone for the overall direction of the S&P 500. Tech giants are heavily weighted in the index and therefore guide its ups and downs. But investors in one particular company should be keenly interested in this week’s reports: I'm talking about Nvidia (NASDAQ:NVDA) investors. In fact, they should watch one crucial number. Let's zoom in for a close look.

Image source: Getty Images.

Nvidia's role in AI

It's important to first consider Nvidia's role in the AI boom. This technology company makes graphics processing units (GPUs), chips that were originally known for their use in the video gaming market. And the gaming customer was once Nvidia's biggest. Then, about a decade ago, Nvidia recognized the AI opportunity and focused the design of GPUs to suit the needs of this industry.

Fast forward to the start of the AI stock market boom, about three years ago, and it was clear that Nvidia had won its AI bet. The company's earnings have been soaring in the double and triple digits, quarter after quarter, to record levels. This is as customers knock at the door, eager to get in on Nvidia's GPUs. The company faces rivals in the space, but so far, it has remained ahead thanks to the speed of its GPUs and its vast selection of related offerings.

In the latest quarter, Nvidia reported a 106% increase in total revenue to $96 billion, with more than 90% of this being data center sales. And the global infrastructure ramp-up is driving this gain, Nvidia said. This is as tech giants turn to Nvidia for GPUs and other products needed in their data centers. Nvidia has been rolling out its latest platform, Vera Rubin, which includes its first-ever stand-alone central processing unit (CPU). These chips, the sorts you'll find in any computer, are seeing a new growth opportunity with the birth of agentic AI -- they drive the software as it takes steps to solve problems.

Upcoming earnings reports

Now, let's return to the subject of this week's earnings reports. As mentioned, Microsoft, Alphabet, and Amazon are scheduled to reveal their latest numbers -- and these three companies are Nvidia customers. Which number should Nvidia investors look to? That would be capital expenditures. Any increase in capex or messages of ongoing heavy spending in the year to come would represent excellent news for Nvidia. It would suggest that these companies will have more to spend on Nvidia's GPUs and systems.

All three companies had something to say about capex in their previous earnings reports: Microsoft offered capex guidance for fiscal year 2027, which started on July 1, and that number is $175 billion. Alphabet expects capex levels for the full year 2026 in the range of $195 billion to $205 billion, up from an earlier estimate of $180 billion to $190 billion. And Amazon increased its cash capex forecast for this year by $20 billion to $220 billion. Each company also spoke of high demand as the major driver for these investments and forecasts. In fact, demand is generally surpassing capacity, in spite of the billions of dollars these companies are pouring into infrastructure expansion.

Considering those recent messages, there's reason for Nvidia investors to be optimistic this time around too. Still, headwinds could emerge at any point, and any slowing of investment would be bad news for Nvidia, at least in the short term. That's why it's important for Nvidia investors to watch the capex trends and demand messages from big tech. This offers us clues about what's to come in Nvidia's next earnings report, in November.

These infrastructure companies will be in the spotlight later this week -- and that means Nvidia will be too.

Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.