AI Titans: Nvidia and Meta Under Trump’s Tax Umbrella

by

If you had told me a few years ago that I’d be writing about artificial intelligence with the same enthusiasm as I once wrote about hiking trails in the Appalachians, I would have laughed-probably while stubbing my toe on a rock. But here we are, in a world where AI is not just reshaping industries but also reshaping tax laws. Yes, tax laws. Who knew they could be so riveting?

On July 4th, President Donald Trump signed into law something called the One Big Beautiful Bill Act. It’s nearly 900 pages long, which sounds like a lot until you realize it’s shorter than some of the instruction manuals for your smart devices. Among its many provisions, two stand out like neon signs in Times Square: one keeps corporate tax rates at 21%, and the other allows companies to immediately deduct R&D expenses rather than spreading them out over time. These tweaks are particularly kind to tech giants like Nvidia (NVDA) and Meta Platforms (META), both of whom seem poised to make hay while the sun shines.

  • The permanence of the 21% corporate tax rate means these companies won’t face the profit-crushing prospect of reverting to the old 35% rate. That leaves more money for things like stock buybacks-a practice that has become almost as American as apple pie. In fact, only two companies in the S&P 500 spent more on buybacks in the last year than Nvidia and Meta.
  • Meanwhile, the repeal of mandatory amortization for R&D spending gives firms an immediate tax break when they invest heavily in innovation. For Nvidia and Meta, whose ambitions in artificial intelligence read like science fiction novels, this is akin to being handed free fuel for their rocket ships.

Now, before you rush off to call your broker, let me clarify something. While Nvidia and Meta look especially compelling right now, they’re far from alone in benefiting from this legislation. Take Apple and Alphabet, for instance, who topped the charts in buyback spending last year. But there’s something undeniably magnetic about these two companies-their potential feels less like a slow train chugging uphill and more like a runaway locomotive careening toward the future.

1. Nvidia

Imagine a company so central to the development of artificial intelligence that describing it as “important” feels woefully inadequate. Welcome to Nvidia. In its fiscal second quarter of 2026, the company reported sales growth of 56%, reaching $46.7 billion, thanks largely to its data center and automotive segments. Non-GAAP earnings grew by 54%, hitting $1.05 per share. And then there’s the Blackwell GPU, described by CEO Jensen Huang as the linchpin in the global AI race. If GPUs were cars, the Blackwell would be a Bugatti Chiron.

Nvidia doesn’t just build hardware; it builds ecosystems. Its GPUs power everything from Tesla’s self-driving software to Amazon’s Zoox robotaxis. At Nvidia’s GTC conference earlier this year, Huang remarked, “We build technology that almost every self-driving car company uses.” Which is either incredibly impressive or slightly terrifying, depending on how much faith you have in machines driving you around.

And speaking of geopolitics, Trump recently lifted export restrictions that had prevented Nvidia from selling its H20 GPU to customers in China. This move could open up significant revenue streams, though getting approval to sell scaled-back versions of newer chips might take longer than waiting for a table at a trendy restaurant.

Analysts expect Nvidia’s earnings to grow by 34% annually over the next three years. At 58 times earnings, the stock isn’t cheap-but then again, neither is a first-class ticket to Mars. Just remember, semiconductors are as cyclical as New England weather, so buckle up if you decide to climb aboard.

Loading widget...

2. Meta Platforms

Meta Platforms is what happens when ambition meets execution-and maybe a touch of madness. The company crushed second-quarter expectations, posting a 22% increase in revenue to $47.5 billion, along with a 38% jump in GAAP earnings to $7.14 per share. Not bad for a company often accused of ruining everyone’s social lives.

As the second-largest ad tech company in the world, Meta sits atop a digital empire comprising Facebook, Instagram, and WhatsApp. Together, these platforms boast more daily users than the population of most continents. Advertisers love Meta because it knows us better than we know ourselves-or at least better than we’d care to admit.

But here’s where it gets interesting. Meta isn’t resting on its laurels. Instead, it’s using artificial intelligence to refine its recommendation algorithms, making our feeds even stickier. During the earnings call, Mark Zuckerberg noted that time spent on Facebook and Instagram increased by 5% and 6%, respectively, thanks to AI-driven improvements. It’s almost poetic, really: the very tools designed to keep us glued to our screens are also helping advertisers find us more efficiently.

Then there’s the untapped goldmine of monetization opportunities. Advertising on Threads and WhatsApp is still in its infancy, and Meta AI-an app with over a billion monthly active users-has yet to flex its commercial muscles fully. When it does, well, let’s just say the possibilities are enough to make any wealth builder giddy.

Wall Street projects Meta’s earnings to grow at a 17% annualized rate over the next three years. With a current valuation of 27 times earnings, it looks like a bargain compared to some of its peers. For investors with patience and a tolerance for occasional turbulence, Meta could prove to be a gem worth holding onto.

So there you have it. Two companies riding the wave of technological progress, buoyed by favorable tax policies. Whether you’re a seasoned investor or someone who still thinks blockchain is a type of cheese, the era of AI offers opportunities aplenty. Just don’t forget to tread carefully-it’s a jungle out there 🦾.

Read More

2025-08-30 11:36