The AI “arms race” has triggered a semiconductor frenzy, with NVIDIA (NASDAQ:NVDA) stock surging nearly 8%, marking its strongest rise in nearly 10 months. Earlier, six of the seven tech giants had already reported their earnings, with the most noteworthy being that Google (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Meta Platforms (NASDAQ:META) will collectively spend approximately $650 billion on capital expenditures in 2026.
Last week, Meta announced its capital expenditures would rise to as much as $135 billion for the year, representing an 87% increase. Meanwhile, Microsoft reported a 66% year-on-year growth in its capital expenditures for Q2, and analysts predict its fiscal year capital spending through June will approach $105 billion.
Jensen Huang, CEO of NVIDIA, specifically praised OpenAI and Anthropic, two leading AI labs, stating that both are “making a lot of money.” NVIDIA invested $10 billion in Anthropic last year, and Huang earlier this week indicated plans to significantly invest in OpenAI’s next funding round. He mentioned, “If they can have twice the computing power, their revenue will increase fourfold.”
Earlier, Taiwan Semiconductor Manufacturing Company (NYSE:TSM), the world’s leading semiconductor foundry, set new performance records and announced plans to significantly increase its capital expenditures to $52-56 billion in 2026, far exceeding market expectations. This is aimed at accelerating the expansion of advanced manufacturing capacity to address the ongoing global shortage of AI chips.
CPO Industry Accelerates, Lumentum Surges Over 9%
NVIDIA, in a recent webinar, announced that three partners—CoreWeave (NYSE:CRWV), Lambda, and TACC—will deploy the IB CPO system in the first half of 2026, and Ethernet CPO products are expected to start shipping in the second half of 2026. The company believes that the CPO industry is advancing more quickly than expected, with the technology first landing in scale-out scenarios and expanding into larger market spaces. As a next-generation optical interconnect solution, the commercial value of CPO continues to become clearer, and its market potential is expanding.
Lumentum (NASDAQ:LITE) CEO Michael Hurlston stated in a recent earnings call that the company’s ongoing growth is primarily driven by cloud optical modules, OCS, and CPO. The development of the OCS business has exceeded expectations, with the first $10 million quarterly revenue target, initially set for Q3, being reached ahead of schedule. Demand for OCS from three core customers has surged, and Hurlston revealed that there is a backlog of over $400 million in OCS orders, most of which are planned to be delivered in the second half of 2026. Orders and revenue are expected to continue growing as they enter 2027.
Roivant Sciences Surges Over 22% After Promising Skin Disease Results
Roivant Sciences (NASDAQ:ROIV) saw its stock rise more than 22% after its subsidiary Priovant Therapeutics reported positive results from the phase 2 trial of its experimental drug brepocitinib. The drug showed improvements in the activity of skin nodular disease at higher doses. Another subsidiary, Pulmovant, also announced the completion of phase 2 trial enrollment involving around 120 patients for its experimental drug mosliciguat, aimed at treating pulmonary arterial hypertension associated with lung disease.
Priovant reported that patients taking a 45 mg dose showed a 22.3-point improvement on a key skin scoring system at week 16, while the placebo group showed only a 0.7-point improvement. The company noted that all patients in the 45 mg group showed significant improvement, with 62% achieving near-complete skin clearance, and 69% achieving complete or nearly complete clearance, while none of the placebo group patients achieved similar results.
Priovant plans to launch phase 3 trials in 2026, following consultations with the U.S. Food and Drug Administration (FDA).