Jay Goldberg

"The big problem for Nvidia is what the capacity they can get out of TSMC... I think that sort of caps their upside... We're already sort of starting to see the stress on the capital market side. It's getting harder and harder to fund these data centers." Nvidia's valuation is predicated on massive, continuous earnings beats. If physical supply constraints at TSMC prevent them from shipping more units, they cannot mathematically generate the revenue upside needed to justify the stock price. Furthermore, if the customers (data centers) are facing a credit crunch or funding fatigue, the "infinite demand" narrative will break. Short. The company is physically constrained on the supply side and facing emerging financial constraints on the demand side. TSMC brings CoWoS (packaging) capacity online faster than anticipated; Hyperscalers continue to spend aggressively despite capital market tightness.

ARM has done a better job diversifying its revenue streams, with a more flexible IP licensing business model. It has stronger traction in automotive and industrial, and a more credible data center story than Qualcomm, which has struggled for a decade to gain a foothold. Despite a thin float that distorts price action, the underlying fundamentals and data center growth are positive.

Intel's strong results and capex increase are fantastic news for the semiconductor capital equipment supply chain. Intel had been a lagging customer in recent years; its renewed spending, combined with memory suppliers globally expanding, creates a powerful demand tailwind for equipment makers.

AMD and Intel are less appreciated AI beneficiaries; Intel is fundamentally restructuring under new leadership and both have strong prospects next year, offering upside relative to the heavily scrutinized NVIDIA.

AMD and Intel are less appreciated AI beneficiaries; Intel is fundamentally restructuring under new leadership and both have strong prospects next year, offering upside relative to the heavily scrutinized NVIDIA.

Apple is strategically buying up memory to secure supply, which will pressure competitors who cannot buy as much and will have to pay higher prices. Apple can recoup the extra memory costs through its services margins in about nine months, giving it a competitive advantage that others lack.

"The fiscal first quarter... does not assume any compute revenue from China in the outlook... gap and non-GAAP gross margins expected to be 74.9% and 75%." Nvidia has successfully decoupled its forward guidance from geopolitical risk (China). By removing China from the outlook, any future sales there become pure upside. Furthermore, the shift to selling "standalone products" like CPUs (Grace) allows them to own more of the server rack, maintaining high margins despite hardware commoditization risks. The beat-and-raise cadence continues, and the quality of earnings is higher with the China risk removed from the baseline. Regulatory tightening on AI exports expands beyond China to other regions (Middle East).