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.com 

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.com 

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

AI's physical buildout looks set to last to 2030 and beyond because financing, memory supply and hyperscaler spending still point to sustained demand. Nebius has $3.5B in financing, IREN $2.4B at 9% and SPCX $40B for GPU equipment. SK hynix expects shortages through at least 2030 and Samsung says HBM4 is sold out; memory companies are making money with no sign of slowing. Google expects 2027 capex to rise significantly. Pullbacks can happen; be cautious and buy quality. x.com 

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.com 

Slowing AI capital spending keeps the semiconductor growth scare in play. Meta's cash flow is negative and Lam Research's capex is slowing, further evidence as the sector faces a growth-to-value rotation and a Fed pause next week. x.com 

Semiconductors are more likely to go up than down from here at current valuations, since 2028 is probably a 20-30% capex growth year. AI capabilities and model revenue are ramping at an unprecedented pace and chip spending drives earnings growth for the whole market, while multiples stay reasonable on cyclical fears. The risk: model revenue added about $170 billion in 2026 against $780 billion of capex, and if capex flattens after an expected $1.1 trillion in 2027, multiples may stay low. x.com 

TSMC's strong AI demand is straining supply, while solid company fundamentals and attractive semiconductor valuations make an abrupt stop to its advance unlikely. TSMC's Wendell Huang expects 2026-28 capex to be significantly higher than in the previous three years to support customer growth; he says most capex is tied to long-term demand. x.com 

Semiconductors may be nearing peak AI-infrastructure euphoria as hyperscalers appear to have overspent on capex. Per a Bloomberg leak, Meta plans to sell excess AI capacity to third parties, entering cloud; one of the world's largest GPU buyers placing surplus capacity is a first warning. The same session showed a textbook rotation, with semis (SOXX) down 6.4% and cloud software (WCLD) up 3.6%. AI is here to stay, but innovation doesn't equal investment success. x.com  x.com  x.com  x.com 

AI suppliers' profits and signed demand distinguish this buildout from dotcom overcapacity. AI leaders rose 2.9x on 3.1x earnings growth versus 7.4x on 2.1x before 2000; cloud providers have $2.3T in signed backlog. Alphabet, Microsoft, Amazon and Meta could repay debt with about six months' cash flow, unlike 2008's leveraged banks. Micron has multiyear take-or-pay deals and ASML has orders years ahead. Memory profits are cyclical; TSMC, ASML and GE Vernova remain favored in AI's early innings. … Show more