AI Spending Pays Off for Major Cloud Providers

Core Insights - Major cloud providers are significantly increasing their investments in AI infrastructure, with combined capital expenditures projected to rise from approximately $150 billion in 2022 to over $360 billion by 2025, while their average return on invested capital (ROIC) has improved by over 900 basis points during the same period [1] - The infrastructure investments have not negatively impacted profitability; instead, they have coincided with improved returns, driven by full utilization of new compute infrastructure and strong cloud revenue from enterprise customers [1] - AI infrastructure is enhancing internal operations, with companies like Meta reporting billions in incremental revenue from AI-driven ad targeting and placement [1] AI Spending and Fund Access - The Alger 35 ETF (ATFV) offers investors exposure to the efficiency trends in AI infrastructure, holding positions in key companies such as Nvidia, Microsoft, and Alphabet [1] - The fund targets approximately 35 U.S. companies identified through fundamental research as having promising growth potential, focusing on highly disrupted market segments [1] - ATFV achieved a return of 37.46% in 2025, outperforming the S&P 500 Index, and was recognized as one of the top-performing stock ETFs of the year by Morningstar [1]