{"id":65633,"date":"2026-07-29T18:08:11","date_gmt":"2026-07-29T22:08:11","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/tech-giants-signal-ai-growth-as-pentagon-awards-massive-submarine-contracts\/65633\/"},"modified":"2026-07-29T18:08:11","modified_gmt":"2026-07-29T22:08:11","slug":"tech-giants-signal-ai-growth-as-pentagon-awards-massive-submarine-contracts","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/tech-giants-signal-ai-growth-as-pentagon-awards-massive-submarine-contracts\/65633\/","title":{"rendered":"Tech Giants Signal AI Growth as Pentagon Awards Massive Submarine Contracts"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong><a href=\"https:\/\/stockmarketwatch.com\/stock\/MSFT\" data-internallinksmanager029f6b8e52c=\"18\" title=\"Stock: MSFT\">Microsoft<\/a> (<a href=\"\/stock\/MSFT\">MSFT<\/a>)<\/strong> reports massive infrastructure expansion, adding <strong>31 data centers<\/strong> this quarter and remaining on track to <strong>double overall capacity<\/strong> within two years.<\/li>\n<li>The <strong>Pentagon<\/strong> awarded <strong>General Dynamics (<a href=\"\/stock\/GD\">GD<\/a>)<\/strong> and <strong>Huntington Ingalls Industries (<a href=\"\/stock\/HII\">HII<\/a>)<\/strong> contracts worth up to <strong>$76.6 billion<\/strong> for nuclear submarine construction.<\/li>\n<li><strong>Meta Platforms (<a href=\"\/stock\/META\">META<\/a>)<\/strong> CEO Mark Zuckerberg outlined a &quot;business in a box&quot; AI monetization strategy, noting that <strong>9 million small businesses<\/strong> are already using its AI creative tools.<\/li>\n<li><strong>Johnson &amp; Johnson (<a href=\"\/stock\/JNJ\">JNJ<\/a>)<\/strong> issued a cautious outlook, forecasting <strong>2026 adjusted EPS of $10.96-$11.11<\/strong>, falling short of Wall Street&#39;s <strong>$11.69 consensus<\/strong>.<\/li>\n<li><strong>Arm Holdings (<a href=\"\/stock\/ARM\">ARM<\/a>)<\/strong> warned of a slight decline in smartphone royalties for the upcoming quarter, guiding for <strong>low-to-mid teens<\/strong> growth in Q2.<\/li>\n<\/ul>\n<h2>Big Tech Doubles Down on AI Infrastructure and Monetization<\/h2>\n<p><a href=\"https:\/\/stockmarketwatch.com\/stock\/MSFT\" data-internallinksmanager029f6b8e52c=\"18\" title=\"Stock: MSFT\">Microsoft<\/a> (<a href=\"\/stock\/MSFT\">MSFT<\/a>) CEO Satya Nadella highlighted the rapid scaling of the company&#39;s AI ecosystem during a recent conference call. <strong>GitHub Copilot<\/strong> has reached <strong>50 million users<\/strong>, while the broader GitHub platform now boasts <strong>225 million users<\/strong>. Enterprise adoption is accelerating, with the number of customers deploying Copilot to the majority of their workforce growing <strong>nearly 75% quarter-over-quarter<\/strong>.<\/p>\n<p>To support this demand, <a href=\"https:\/\/stockmarketwatch.com\/stock\/MSFT\" data-internallinksmanager029f6b8e52c=\"18\" title=\"Stock: MSFT\">Microsoft<\/a> added <strong>31 new data centers<\/strong> across five continents this quarter alone. The company also added <strong>one gigawatt of capacity<\/strong>, maintaining its trajectory to <strong>double its total capacity over the next two years<\/strong>. This aggressive expansion underscores the massive capital expenditure required to lead the generative AI race.<\/p>\n<p>Meta Platforms (<a href=\"\/stock\/META\">META<\/a>) is following a similar path, with CFO Susan Li stating that <strong>industry capacity will remain tight<\/strong> for the foreseeable future. CEO Mark Zuckerberg detailed plans to monetize AI through a <strong>&quot;business in a box&quot;<\/strong> model, utilizing a mix of subscriptions and volume-based pricing. Zuckerberg believes the margin on <strong>selling intelligence<\/strong> will be significantly higher than selling raw compute.<\/p>\n<h2>Pentagon Issues Record Submarine Contracts<\/h2>\n<p>The U.S. Department of Defense announced a massive investment in naval superiority, awarding <strong>General Dynamics (<a href=\"\/stock\/GD\">GD<\/a>)<\/strong> and <strong>Huntington Ingalls Industries (<a href=\"\/stock\/HII\">HII<\/a>)<\/strong> contracts valued at up to <strong>$76.6 billion<\/strong>. The deal includes the construction of <strong>nine new &#39;Block VI&#39; Virginia-class attack submarines<\/strong> and <strong>five Columbia-class nuclear-missile submarines<\/strong>.<\/p>\n<p>Following the announcement, shares of <strong>General Dynamics (<a href=\"\/stock\/GD\">GD<\/a>)<\/strong> rose <strong>2.4%<\/strong> in after-hours trading, while <strong>Huntington Ingalls (<a href=\"\/stock\/HII\">HII<\/a>)<\/strong> climbed <strong>2%<\/strong>. The Pentagon also committed <strong>$5 billion<\/strong> toward shipyard infrastructure improvements to ensure the domestic industrial base can meet these expanded production goals.<\/p>\n<h2>Mixed Outlooks for Healthcare and Semiconductors<\/h2>\n<p>Johnson &amp; Johnson (<a href=\"\/stock\/JNJ\">JNJ<\/a>) provided a disappointing financial outlook in a recent SEC filing. The company expects <strong>2026 adjusted EPS<\/strong> to fall between <strong>$10.96 and $11.11<\/strong>, trailing the <strong>$11.69<\/strong> analysts had anticipated. Despite the soft guidance, J&amp;J is moving forward with a <strong>$2.58 billion strategic agreement<\/strong> to potentially acquire <strong>Sail Biomedicines<\/strong>, signaling a continued focus on high-growth biotech assets.<\/p>\n<p>In the semiconductor space, Arm Holdings (<a href=\"\/stock\/ARM\">ARM<\/a>) executives noted that <strong>smartphone royalties<\/strong> are expected to soften slightly in the next quarter. However, the company maintains a steady <strong>$200 million quarterly run rate<\/strong> for spending and reports that customer demand remains strong across its other business segments. <em>Investors remain focused on how these firms will balance high R&amp;D costs with shifting consumer demand.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Microsoft (MSFT) reports massive infrastructure expansion, adding 31 data centers this quarter and remaining on track to double 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