Nvidia and TSMC: Strong Demand for AI
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy NVDA?
Source: Fool
- Record Sales for TSMC: TSMC reported net revenue of NT$401.26 billion (approximately $12.7 billion) in January, marking a 37% year-over-year increase and a 20% month-over-month rise, achieving the highest monthly sales in its history, which strongly supports the demand for Nvidia's GPUs.
- Market Dominance: TSMC controls about 71% of the global chip market and manufactures over 90% of the most advanced semiconductors, establishing itself as a key bellwether for AI demand and further solidifying its position in high-performance computing and smartphones.
- Surge in Data Center Spending: Data center spending is expected to reach $3 trillion to $4 trillion by 2030, with GPUs accounting for roughly 39% of total costs, positioning Nvidia, as the leading data center GPU supplier, to benefit significantly from this trend and drive future revenue growth.
- Optimistic Analyst Ratings: Among 63 analysts, 94% rate Nvidia as a
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NVDA is 264.97 USD with a low forecast of 200.00 USD and a high forecast of 352.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 190.040
Low
200.00
Averages
264.97
High
352.00
Current: 190.040
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Record Sales for TSMC: TSMC reported net revenue of NT$401.26 billion (approximately $12.7 billion) in January, marking a 37% year-over-year increase and a 20% month-over-month rise, achieving the highest monthly sales in its history, which strongly supports the demand for Nvidia's GPUs.
- Market Dominance: TSMC controls about 71% of the global chip market and manufactures over 90% of the most advanced semiconductors, establishing itself as a key bellwether for AI demand and further solidifying its position in high-performance computing and smartphones.
- Surge in Data Center Spending: Data center spending is expected to reach $3 trillion to $4 trillion by 2030, with GPUs accounting for roughly 39% of total costs, positioning Nvidia, as the leading data center GPU supplier, to benefit significantly from this trend and drive future revenue growth.
- Optimistic Analyst Ratings: Among 63 analysts, 94% rate Nvidia as a
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- Financial Expectations: Analysts forecast Coinbase's Q4 revenue to be $1.85 billion, down 18.5% from $2.27 billion last year, with an expected earnings per share of $1.07, reflecting a significant 68% year-over-year decline that could negatively affect investor confidence.
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- Massive Capital Expenditure: Alphabet and Meta are planning to invest $305 billion in 2026 to expand AI bandwidth, significantly higher than last year's spending, indicating strong market demand for AI infrastructure that directly boosts Nvidia's market share and revenue growth.
- Market Dominance: Nvidia holds approximately 90% market share in the data center chip market, leveraging its Hopper, Blackwell, and upcoming Ruben architectures along with CUDA software to enhance its competitive edge in AI application development, ensuring sustained revenue growth.
- Strong Financial Performance: For the third quarter of fiscal 2026, Nvidia reported a 62% increase in revenue and a 65% rise in net income year-over-year, showcasing its robust performance in the AI sector, attracting investor interest and boosting market confidence.
- Potential Risk Factors: Despite Nvidia's impressive results, concerns about an AI bubble and the trend of customers seeking self-sufficiency could pressure future sales, necessitating careful evaluation of the sustainability of long-term returns by investors.
See More
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- Jobs Data Release: The Bureau of Labor Statistics is set to release the delayed January Non-Farm Payrolls report at 8:30 a.m. ET, which will provide crucial economic health indicators that could influence investor decisions and market trends.
- Nvidia Faces Competition: ByteDance is reportedly developing an AI chip and is in talks with Samsung Electronics for manufacturing, posing potential competitive pressure on Nvidia that could impact its market share and technological leadership.
- Retail Sentiment Shift: Retail sentiment towards the SPDR S&P 500 ETF remains 'bearish', while the Invesco QQQ Trust ETF sentiment has dropped from 'bearish' to 'extremely bearish', indicating heightened investor concerns over tech stocks that may affect their performance.
- Earnings Season Approaches: Investors are gearing up for quarterly earnings reports from companies like Shopify, Kraft Heinz, Unity Software, Cisco, QuantumScape, and MGM Resorts, which will provide critical insights into profitability outlooks and industry dynamics.
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Nvidia and Broadcom Competition: Nvidia and Broadcom are entering direct competition as AI companies seek cost-effective solutions for training and running AI models.
Growing Demand for Broadcom: Analysts at UBS report a rapid increase in demand for Broadcom's processors as a viable alternative to Nvidia's offerings.
See More
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- AI Chip Collaboration: ByteDance is partnering with Samsung Electronics to produce 100,000 AI chips in 2024, with plans to ramp up annual production to 350,000 units, significantly enhancing ByteDance's competitiveness in the AI sector while putting pressure on Nvidia's business in China.
- Increased Market Challenges: As ByteDance and other Chinese tech firms accelerate their efforts to develop AI chips domestically, Nvidia faces greater challenges, particularly with its H200 chip sales still awaiting government approval, which could impact its market share in China.
- Technological Progress and Strategic Positioning: ByteDance has been hiring chip-related staff since 2022 and has engaged U.S. chipmaker Broadcom for chip design, indicating a long-term strategic positioning in the high-end semiconductor field aimed at reducing reliance on external suppliers.
- Intensified Industry Competition: The SeedChip project positions ByteDance to compete with rivals like Alibaba and Baidu, which have already launched their own AI chips in the market, further intensifying competition within the industry.
See More
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- Record Sales for TSMC: TSMC reported net revenue of NT$401.26 billion (approximately $12.7 billion) in January, marking a 37% year-over-year increase and a 20% month-over-month rise, achieving the highest monthly sales in its history, which strongly supports the demand for Nvidia's GPUs.
- Market Dominance: TSMC controls about 71% of the global chip market and manufactures over 90% of the most advanced semiconductors, establishing itself as a key bellwether for AI demand and further solidifying its position in high-performance computing and smartphones.
- Surge in Data Center Spending: Data center spending is expected to reach $3 trillion to $4 trillion by 2030, with GPUs accounting for roughly 39% of total costs, positioning Nvidia, as the leading data center GPU supplier, to benefit significantly from this trend and drive future revenue growth.
- Optimistic Analyst Ratings: Among 63 analysts, 94% rate Nvidia as a
See More
