Dan Ives
Technology Analyst & Partner at Yorkville Ives
AI is a true fourth industrial revolution, and earnings from neoclouds and hyperscalers make it crystal clear that monetization is now taking over. Skeptics are bearish from their offices but are not in Taiwan's fabs seeing the demand, and for the first time in 30 years the US is ahead of China in tech. China, backed by its government, should not be counted out. api.omny.fmÂ
AI chips remain the trade to own because demand outstrips supply about 12-15 to 1, leaving no equilibrium for another year and a half to two years. Checks in Taiwan and Korea show no cracks, and the AI buildout is in the third inning. Margin pressure from competition, as Google, Amazon and others make their own chips, likely won't show for 9-12 months. Pullbacks like the memory-chip selloff are gut-check moments and buying opportunities, but investors must be selective and own the winners. api.omny.fmÂ
Semiconductors could stay undersupplied for a long time as more capable AI per dollar creates more uses and drives compute demand. Micron and NVIDIA trade at low forward P/Es because investors fear peak cyclical earnings, yet current earnings show no slowdown. Shortages may worsen as AI adoption spreads, though the industry could remain cyclical; a reversal of the forced rollover trade is hoped for, not assured. x.com x.com x.comÂ
TSMC's latest results point to AI chip demand still running ahead of supply, supporting the semiconductor and equipment trade. Cantor says TSMC raised its 2026 revenue outlook again, guided December-quarter sales above consensus and held 65-67% gross-margin guidance through the N2 ramp; its bullish sector read names Nvidia, Broadcom, AMD, ASML, Applied Materials, Lam Research and KLA. Jensen Huang says AI labs need not reach trillions in revenue to justify the buildout. x.com x.comÂ
Semiconductor trade faces a capex growth ceiling even if AI delivers what bulls expect. Spending cannot compound at 70-100% a year indefinitely, and compute per dollar roughly doubles every two years, so the same budget buys more capacity later. Today's chip valuations also demand years of 20% AI earnings growth beyond 2028: roughly 10.9 extra years for AMD, 8.9 for ASML, 7 for Marvell and 6.4 for TSMC, versus 1.6 for Broadcom and 0.8 for Nvidia; Micron needs none under the chart's assumptions. … Show more
TSMC's capex plans suggest the AI chip trade is not over for semiconductors, Nvidia, AMD and Micron. CFO Wendell Huang cites robust multi-year demand, including agentic AI, behind $60-64 billion of 2026 capex; TSMC expects 2026-28 spending to be even more significantly higher than in the prior three years. Hyperscaler earnings should reinforce the higher AI capex trajectory. CoreWeave-driven fears feel overdone, though the neocloud model does not appeal long term. x.com x.comÂ
Chip-equipment makers look cheap given supply-chain shortages and demand visible toward 2029-30. At Semicon West, no one raised demand concerns; suppliers' suppliers lacked capacity, while several high-quality names trade below the S&P multiple. Per Lynx's KC, customers are asking about delivery three to four years out. For Lam Research's report, bottlenecks, pricing and visibility beyond 2027 matter more than demand. x.com x.comÂ
Semiconductor stocks' easy-money phase is over as the sector shifts from hype to show-me-the-money. The SOX index is down over 15% from its June peak, chip funds saw $11B of outflows in one week, the largest this century, short interest is at a three-year high and earnings growth is projected to slow by 2027. Memory and logic chips remain commodity-like. This is cyclical cooling, not a death knell; the AI build-out continues, but expect more turbulence and favor companies with defensive moats. … Show more
Rising AI equipment demand could sustain the buildout behind Micron, Nebius, Marvell, Bloom Energy and Applied Optoelectronics. ASML says customers are raising short- and medium-term forecasts, some are interested in orders for 2029 or 2030, and its currently planned 2027-28 supply may not fully meet demand. The dip in these AI stocks might be a buying opportunity. x.comÂ
AI infrastructure bottlenecks could give eight stocks as much as 18x upside. Nvidia supplies frontier-model GPUs; Broadcom and Marvell supply custom silicon and networking; TSMC makes advanced chips; Micron supplies sold-out HBM; Vertiv provides power and cooling; Palantir monetizes enterprise AI; Alphabet spans TPUs, research, cloud and apps. The list tracks where AI infrastructure spending is flowing. x.com x.comÂ
Semiconductor stocks face a few months of volatility and pullbacks from a helium shortage, as Qatar supplies about a third of global helium and the Middle East conflict is tightening supply. Helium is critical to chipmaking, so this brings supply-chain stress and headline-driven selling. Big AI, data-center and advanced-chip players will get priority, so production continues at higher cost. Longer term, the constraint reinforces the AI cycle by making high-end chips more valuable. x.comÂ
A supply response could compress Western Digital's pricing and margins, eroding its apparent cheapness. Its 2013-24 normalized earnings merit a look: even huge demand growth in other industries eventually drew supply and mediocre returns. A digestion/reset would hurt buy-and-hold investors, though the outcome is uncertain. Pre-AI economics were mediocre and unlikely to become amazing post-AI; TSMC's stronger pre-AI economics make its post-AI case better. x.com x.com x.comÂ
