Good news was hard to come for Nvidia(NASDAQ: NVDA) Investors have been visible lately from approximately 10% of the company’s price drop in the last three months.
Once high flying Artificial intelligence (AI) The chip supplies separated multiple winds Despite achieving extraordinary growth and leading above expectations when he announced his last quarterly results in November last year. Out of concern about slowing down its growth due to the weakening of demand of AI chip to intensification of competition to export-related limit to recent breakthroughs that have claimed Chinese start-up deepseek, numerous factors outside Nvidia’s control have reduced supplies.
However, Taiwanese semiconductor productwith (Nyse: tsm) Sale for January 2025. They suggest that investors are concerned about the health of demand of AI chips and NVIDIA performance can be overstated. Let’s see why this may be the case.
Nvidia is a manufacturer of the Fabless chip, which means that there is no craftsmanship plant and simply designs chips. Production for TSMC, the world’s leading foundry of the semiconductor that produces chips for chip manufacturers and consumer electronics. Because of this, the 36% revenue jump of TSMC last month is an indication that the demand for Nvidia’s AI chips has not disappeared.
More importantly, TSMC reported on revenue growth of 58% and 34% in the last two months of 2024. As the fiscal fourth fourth fourth quarter 2025. Nvidia coincides with these three months, there is a solid likelihood that the chipser could exceed Wall Street expectations when his results were published later this month.
Of course, Nvidia is not the only buyer who has TSMC. However, it is worth noting that Nvidia was allegedly the second largest buyer of TSMC in 2023, which made up 11% of the revenue of the latter. Also, recent movements indicate that the share of NVIDIA’s revenue may have increased. For example, Applewho was the largest buyer of TSMC in 2023, noticed the fall of the iPhone shipment in the fourth quarter of 2024 4% compared to one year.
So, it is probably that in the last three months, TSMC may have produced more chips for Nvidia, and this could be converted into a stronger growth of sales for the latter. The other thing worth noting here is that TSMC is expected to increase its advanced package capacity by about 85% this year to range from 65,000 to 75,000 waffles a month to satisfy a strong demand for AI chips.
Nvidia is expected to get a hand at 63% of this increased capacity. Rivals like Broadco and Advanced micro devices It is foreseen to be distant to second and third positions with 13% and 8% of the share. All of this indicates that Nvidia -in chain of supply of AI chips is likely to intensify at the age of 2025.
Throw the fact that the main providers of computing in a cloud like Meta platform,, Microsoft,, Alphabetand Amazon They are set up that they would set up their Capex in the big year, and the improved chain of NVIDIA supply could help him fill in multiple orders and maintain his impressive growth. These four technological giants were supposed to increase their combined capital costs by 46% in 2025. To a huge $ 325 billion as it will continue to spend more money to build an AI infrastructure.
The debate clearly makes it clear that Nvidia is on his way to benefits from a favorable environment of demand of AI chips. At the same time, the focus of the company on the strengthening of its supply chain to fulfill greater demand, and a great increase in TSMC revenue from the late further indications that Nvidia should be able to maintain its healthy growth rate this year.
Analysts expect 52% of Nvidia’s revenue jump nearly $ 196 billion in the new fiscal year (which has just begun). However, do not be surprised when Nvidia exceeds this mark, as the incremental capital consumption of $ 102 billion by major technological players in 2025 will be more than about $ 83 billion in incremental consumption last year.
Nvidia is in a great position to bit the lion’s part of this increased capital consumption as it is expected to control 85% of the AI chip market this year. As such, the cards appear stronger than the expected display of NVIDIA when publishes its fiscal results of the fourth quarter 2025. February 26, which could only be a catalyst that this AI stock should regret it.
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Randa Zuckerberg, former director of the development of the market and spokeswoman for Facebook and sister of Meta Platform Executive Director Mark Zuckerberg, is a member of the Board of Directors Motley Fool. John Mackey, former Whole Foods Market CEO, Amazon Branch, is a member of the Board of Directors Motley Fool. Suzanne Frey, Executive Director of Alphabeta, is a member of the Board of Directors Motley Fool. Sharp Chauhan There is no position in any of the shares mentioned. Motley Fool has positions and recommends advanced micro devices, alphabet, Amazon, Apple, Meta platform, Microsoft, Nvidia and Taiwan Semiconductor Manufacturing. Motley Fool recommends Broadcom and recommends the following options: Long January 2026. $ 395 calls to Microsoft and short January 2026. $ 405 calls to Microsoft. Motley Fool has disclosure rules.
