Nvidia Surpasses Apple as TSMC's Largest Customer, Contributing 13% of Revenue
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 22 2026
0mins
Source: Benzinga
- Customer Status Change: Nvidia publicly confirmed it has surpassed Apple to become TSMC's largest customer, contributing approximately 13% of total revenue, highlighting the significant impact of AI demand on the semiconductor supply chain.
- Market Share Reversion: Nvidia was TSMC's largest customer in the early 2000s before being overtaken by Apple in the 2010s, and this return signifies a shift in industry dynamics driven by the rise of AI technology.
- Future Outlook: Analysts expect Nvidia's AI leadership to extend into 2026, particularly as sustained spending on AI infrastructure drives strong performance in the AI accelerator market.
- Stock Price Dynamics: Nvidia shares rose 0.82% to $184.83 in premarket trading on Thursday, reflecting market confidence in its future growth, while TSMC's stock also increased by 1.63%.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 197.580
Low
200.00
Averages
264.97
High
352.00
Current: 197.580
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is an artificial intelligence (AI) infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. Its segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing and networking platforms and AI solutions and software, and automotive platforms and autonomous and electric vehicle solutions, including software. The Graphics segment includes GeForce GPUs for gaming and personal computers (PCs), and Quadro/NVIDIA RTX GPUs for enterprise workstation graphics. Its technology stack includes the foundational NVIDIA CUDA development platform that runs on all NVIDIA GPUs, as well as hundreds of domain-specific software libraries, frameworks, algorithms, software development kits (SDKs), and application programming interfaces (APIs). Its platforms address four markets, which include Data Center, Gaming, Professional Visualization, and Automotive.
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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- Market Leadership: Nvidia remains the undisputed leader in the GPU market, and with hyperscalers investing heavily in AI infrastructure, this trend is expected to continue, further solidifying its market dominance and driving future growth.
- Relative Valuation: Despite Nvidia's stock appearing cheap relative to its growth potential, trading at a forward P/E of 22.2x compared to the tech sector's average of 22.4x, this suggests the market may be undervaluing its future growth prospects.
- Investor Confidence: Although the stock has seen recent declines, analysts believe Nvidia can still deliver above-average returns, prompting investors to seize the opportunity to buy its shares for solid returns in the coming years.
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- Future Earnings Expectations: Analysts project Nvidia's earnings at $8.97 per share for this fiscal year and $12.76 for the new fiscal year, reflecting optimism about its growth, even as the current stock trades at less than 22 times earnings.
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- Staggering Returns: Nvidia has achieved a compound annual growth rate of 59.49% since 2021, meaning a $1,000 investment five years ago would now be worth $10,319.71, significantly outperforming the S&P 500's 13.06% growth, highlighting its exceptional investment potential.
- Market Leadership: Nvidia remains the undisputed leader in the GPU market, and with hyperscalers investing heavily in AI infrastructure, this trend is expected to continue, further solidifying its market dominance and driving future growth.
- Relative Valuation: Despite Nvidia's stock appearing cheap relative to its growth potential, trading at a forward P/E of 22.2x compared to the tech sector's average of 22.4x, this suggests the market may be undervaluing its future growth prospects.
- Investor Confidence: Although the stock has seen recent declines, analysts believe Nvidia can still deliver above-average returns, prompting investors to seize the opportunity to buy its shares for solid returns in the coming years.
See More
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- Stock Price Fluctuations: Despite an 8% drop in June, Nvidia's stock has risen 24% over the past year, indicating its long-term growth potential, even as market leadership shifts.
- Strong Financial Performance: The latest financial report reveals an 85% year-over-year revenue increase and a 55.7% adjusted net margin, showcasing robust profitability despite declining sales in China and rising competition.
- Future Earnings Expectations: Analysts project Nvidia's earnings at $8.97 per share for this fiscal year and $12.76 for the new fiscal year, reflecting optimism about its growth, even as the current stock trades at less than 22 times earnings.
- Market Competition Dynamics: While competitors are emerging in the AI space, Nvidia is still trading at a lower price-to-earnings ratio compared to many slower-growing tech companies, indicating its relative value and potential investment opportunities.
See More
Anthropic Explores Development of Custom AI Processors
- Infrastructure Control: Anthropic is developing its own AI processors to reduce infrastructure costs and plans to collaborate with Samsung on its advanced 2-nanometer manufacturing technology, thereby enhancing control over its hardware supply chain and improving its competitive position in the AI market.
- Industry Trend: This move reflects a broader trend among AI developers seeking to command their backend supply chains, with Anthropic's exploration mirroring efforts by competitors like OpenAI, indicating a growing demand for proprietary hardware.
- Talent Recruitment: To strengthen its chip design capabilities, Anthropic has begun recruiting specialized engineering talent, recently hiring key engineer Clive Chan from OpenAI's silicon division to advance its custom chip development.
- Market Sentiment: Although neither Anthropic nor OpenAI is publicly listed yet, retail sentiment on Stocktwits is bearish, indicating cautious investor attitudes towards the future of the AI industry, while also highlighting interest in related market-traded funds.
See More
Microsoft vs. Nvidia: The Best AI Investment Choice
- Nvidia's Growth Potential: Nvidia's Vera Rubin AI chip platform is expected to secure $1 trillion in orders by 2027, indicating strong demand in AI data centers, although its current market cap of $4.8 trillion is below historical highs and may decline further over the next two years.
- Microsoft's Strategic Shift: Microsoft has achieved significant cloud growth through its partnership with OpenAI but faces competitive pressure in the AI space, prompting it to consider incorporating open-source models into Copilot to reduce costs and enhance market competitiveness, demonstrating its adaptability to market changes.
- Diversification Advantage: Microsoft's diversified presence across software, cloud computing, and AI reduces its risk profile; while its growth potential may not match Nvidia's, its $2.9 trillion market cap and $627 billion in commercial performance obligations provide a solid foundation for future growth.
- Valuation and Growth Outlook: With a current P/E ratio of 22, below the 33 times average over the past decade, and analysts projecting annual growth of 16% to 17% over the next three to five years, Microsoft emerges as a safer investment choice in the current market environment.
See More
Meta's Cloud Business Threatens AI Cloud Providers
- Emerging Competition: Meta Platforms is developing a cloud business that may sell AI computing power, causing shares of CoreWeave and Nebius to drop 13.9% and 17%, respectively, indicating market concerns over new competition.
- Customer Dependency Issues: CoreWeave's $21 billion commitment from Meta and Nebius's $27 billion agreement deepen their reliance on Meta, raising concerns that if Meta builds its own cloud services, it could reduce demand for both companies.
- CoreWeave's Financial Strain: Despite a 112% year-over-year revenue increase to $2.08 billion in Q1, CoreWeave's net loss widened to $740 million, with total debt reaching $24.9 billion, highlighting financial risks amid expansion.
- Nebius's Growth Potential: Nebius reported a 684% year-over-year revenue increase to $399 million in Q1, with projections of $3 billion to $3.4 billion in revenue by 2026, showcasing stronger growth potential and healthier financials.
See More
Meta Plans to Sell AI Computing Capacity, Impacting Cloud Specialists
- Customer Competition Risk: Meta's plan to develop a cloud business to sell AI computing capacity has led to a 13.9% drop in CoreWeave and a 17% decline in Nebius shares, indicating significant concerns about their future revenues.
- Contract Dependency: CoreWeave has a $21 billion contract with Meta, while Nebius's agreement is worth up to $27 billion, and Meta's potential competition could undermine the market positions and revenue stability of both companies.
- Financial Status Comparison: CoreWeave reported a 112% year-over-year revenue increase to $2.08 billion in Q1, but its net loss widened to $740 million with total debt reaching $24.9 billion, highlighting increasing financial risks.
- Growth Potential: In contrast, Nebius's Q1 revenue surged 684% year-over-year to $399 million, with projections of $3 billion to $3.4 billion in revenue by 2026, showcasing stronger growth potential and healthier financial status.
See More
