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supports the bullish case for for AI. Is that what you've been finding? Yeah, I'd say overall in the region, look, demand to supply for Nvidia chips. It's about 10 to one, you know, potentially 12 to one. You know, look, we do these trips, you know, three, four times a year. It's about what demand looks like in the region from production.
What it's the use cases that are driving it, but it comes down to on the hardware side, right? And that's super bullish for Nvidia. I think streets underestimating numbers by anywhere from 20 to 30% in the next 12 to 18 months. And mostly what I think this also means is like on the hypers scour in terms of everything we've seen from Microsoft, from Google, from Amazon, obviously Oracle like you saw today.
I mean, we're only in the second inning of this all playing out and all of our checks are just giving us more and more bullishness that that this is going to continue. I think streets underestimating it. So Dan, can you elaborate on where you're doing these channel checks? Because if there are ex, you know, export controls, what what chips are you talking about, where are these channels that you're checking?
Yeah, I mean, if you look especially in Taiwan and what we're seeing, you know, from Nvidia, I I think it all comes down to what is what does demand supply look like. Now you obviously you have the controls in terms of China and that continues to be a question mark but my view is that what does demand look like in the region and I think what I compare it to even 3 months ago it's probably up 20%.
And I think what that shows that this demand that we're seeing across the region especially from a production perspective you can't argue with the demand and the demand's being driven by the use cases. It's being driven by obviously big tech spending, but I think if there's a sort of a headline here, it's not slowing down.
I think capbacks is going to be significantly underestimated now going into next year. And that's bullish for Nvidia, bullish for AMD, bullish for TSMC, and of course on the hyperscaler side. And then you look at names like Palunteer, Snowflake, the consumption use case plays that that's why I think there was continue to be just, you know, pound the table as a broader group.
Hey Dan. Um, I hope you're doing dim sum for breakfast. Um, because that's how that is breakfast. I know, but I had to go to Hong Kong to learn that. So, um, I hope you're enjoying breakfast. Um, question about Huawei. What are you hearing there? What are you hearing about the chips that they're, you know, basically creating to compete with Nvidia and ultimately AMD?
And, you know, we're in a situation where they basically have import controls um, right now. I'm just curious like what the vibe is out there. Yeah, it's a huge opportunity for Huawei, right? I mean, especially what's happened with big tech in China and they're trying to narrow the gap. You know, I think there's there's still if you look where Nvidia is globally, I think that continues to be the chip everyone wants.
But look, it also speaks to like, you know, in our eyes 30, we have Alibaba and Biden. Like I think those are going to be two names from a China perspective, specifically Alibaba that is in a prime position for that to accelerate. But but it just shows look this is an AI arms race playing out and that's bullish from an investor perspective on both sides whether it's China or US.
This quarter marks the end of 2025 a year that will be remembered for its delightfully resilient stock market. In spite of trade disputes, global tensions and a faltering economy. While the benchmark S&P 500 has up just 11.6% for the year, tech companies are still leading the way, up 18%. Fear-mongers are predicting a tech bubble, especially in AI stocks.
But those gloomy predictions seem to be misplaced. According to Grand View Research, the worldwide AI market is expected to increase from $279.2 billion in 2024 to about $3.5 trillion by 2033 at a compound annual growth rate of 31.5%. Nvidia is the greatest option if you want to open fresh positions with AI stock this October.
because it appears poised to end the year strongly. Nvidia, a chipmaker that has benefited greatly from the AI boom, is currently the big dog on Wall Street. Its market capitalization increased 1,380% over the previous 3 years to reach $4.4 trillion, and it appears to be headed for a $5 trillion valuation in the near future.
NVIDIA manufactures graphics processing units, GPUs, which are necessary for high-end computing in order to execute machine learning, AI powered applications, big language models, and other complex activities. With 46.7 billion in revenue in the second quarter alone, up 56% from the same period last year, the corporation is a money monster.
Data center solutions account for the majority of the revenue, $ 41.1 billion, with the company's Blackwell GPUs currently seeing widespread use. Despite being excluded from the Chinese market, Nvidia is working to increase its earnings even further. It will be allowed to export chips worth tens of billions of dollars to the Middle East after recently obtaining an export license for the United Arab Emirates.
Due to the widespread use of its GPUs, Nvidia is actively seeking to expand its network of significant partners in order to fortify its competitive advantage. On October 14th, Oracle declared that Nvidia GPUs would power their OCI Zeta scale 10 computing cluster for high performance AI inference and training applications.
Additionally, Nvidia made a $5 billion investment in Intel, forming a collaboration to create AI data center and PC chip generations. This year, it also unveiled Nvolink Fusion, which enables third party chips to be incorporated into data centers with NVIDIA GPUs and is compatible with equipment from other businesses.
Considering that it is about 20% lower than it was in the first quarter, the company's projected price to earnings ratio of 40 is expensive. The stock of Nvidia will keep rolling like a freight train. The top provider of artificial intelligence AI chips for data centers worldwide is Nvidia. All indications point to another outstanding performance when the corporation releases its operating results for the third quarter of fiscal 2026 on November 19th.
In comparison to its long-term average, Nvidia's stock is currently trading at an appealing value, which may lead to substantial upside. Due to the tremendous demand for its data center chips, which are now the standard for artificial intelligence, AI development, Nvidia became the first $4 trillion corporation in the world earlier this year.
Nvidia's operating results for the third quarter of fiscal 2026, which concludes on October 31st, will be made public on November 19th. Investors will receive an update on the company's financial performance in the report and CEO Jensen Hang will offer insightful commentary during the conference call that goes along with it.
This is why I think the news will cause Nvidia's stock to surge. Up until now, every AI model generation has demanded a greater amount of processing power than the one before it. The initial iterations of OpenAI's chat GPT relied on large language models, LLMs, which were excellent at producing quick responses, but not always precise.
Jensen Huang claims that the most recent AI reasoning models use 101,000 times more token words and symbols by thinking in the background to provide optimal results. The demand for processing power is skyrocketing as a result of every leading AI startup, including OpenAI, Anthropic, and Meta Platforms developing AI reasoning models.
These workloads are the focus of Nvidia's most recent Blackwell Ultra GB300 graphics processing units, GPUs, which offer up to 50 times the performance of the company's outdated H100 processors, which were introduced in 2022. Reuben, a whole new GPU architecture that Nvidia will introduce next year, is said to be 3.3 times more powerful as Blackwell Ultra, or over 165 times more powerful than the H100's Hopper design.
Given that the last quarterly investor conference call for 2025 is scheduled for November 19th, Hang may provide an update on Reubin's launch. As data center operators upgrade their infrastructure to satisfy demand from AI developers, Hang estimates that they will invest $4 trillion between now and 2030.
These new GPUs will help Nvidia secure a dominant portion of this spending. According to Nvidia's projection, its third quarter sales is expected to reach approximately $54 billion, a 54% rise over the same period last year. Nearly 90% of that revenue will come from the data center segment, which is where the business sells its AI GPUs.
According to prior quarters, Nvidia may possibly generate earnings of $124 per share, which would represent a 53% increase in year-over-year growth. According to Wall Street's consensus estimate, the price of Nvidia stock may rise significantly if this number reaches or surpasses expert projections, but more on that later.
Investors should also keep an eye on Nvidia's forward guidance on November 19th as it may serve as a reliable predictor of future demand for the company's processors. A higher figure from management might be another bullish driver for Nvidia stock as Wall Street is expecting $61.1 billion in revenue for the fourth quarter, which ends around January 31st, 2026.
Even though Nvidia's stock is currently trading close to a record high, it may potentially be inexpensive. Nvidia's stock is currently selling at a price toearnings ratio, PE of 51.9, which is based on the company's trailing 12-month earnings of $3.56 per share. That represents a 15% discount to Nvidia's average PE ratio of 60.9 for the previous 10 years.
Despite being a significant premium to the NASDAQ 100 technology index, which trades at a PE ratio of 33.5, the company's PE ratio may appear even more affordable in comparison to its 10-year average if its third quarter earnings on November 19th meet or surpass Wall Street's estimate, opening the door for stock growth.
Going a bit farther ahead, Wall Street anticipates that Nvidia will generate $450 salons per share for the full fiscal year 2026 and 638 per share for the fiscal year 2027. According to such projections, the forward PE ratios for Nvidia's shares are 40.5 and 28.6, respectively. To put it another way, if Wall Street's projections come to pass, Nvidia's stock would need to rise by 113% over the course of the next 12 to 18 months in order for its PE ratio to reach its 10-year average of 60.9.
One phase in that process is the report that will be released on November 19th. But since the market is a forward-looking machine, I believe that as long as Nvidia's financial results continue to match or surpass expectations, investors will continue to place a premium on the company's future potential.
After Taiwan semiconductor manufacturing come TSMC, announced a record third quarter profit and increased its 2025 sales outlook driven by rising demand for AI class chips. Nvidia's stock saw a substantial increase on Thursday amid bullish sentiment. Even the bulls acknowledge that the air is becoming much thinner as the argument about whether the AI trade can be sustained heats up.
According to Goldman Sachs, this isn't a 1999 remake since actual profits, not just promises, are what are driving the current AI boom. They claim that it is successfully protected from bubble area by strong balance sheets and quantifiable production gains. Additionally, UBS projects AI capital expenditures will reach $375 billion next year, rising to $500 billion by 2026, while Morgan Stanley projects AI software sales to reach an astounding $1.1 trillion by 2028.
With Google alone projected to spend almost $85 billion in 2025, Alphabet, the parent company of Google, and Microsoft are increasing their budgets in an effort to outspend their rivals. Furthermore, Jensen Hang of Nvidia describes it as a move from conventional data centers to AI factories, praising it as an industrial revolution rather than a passing trend.
But the doubters are raising the alarm. Barclays warns that power and logistics constraints may slow returns, pointing out that AI's contribution to GDP is still only slightly less than 1%. While billionaire Jeremy Granthm sees super bubble characteristics developing across US stocks, seasoned investor Rob Arnot likens Nvidia's rise to the frenzy of 1999.
Insiders are hedging as well. Sam Alman of OpenAI believes that investors are over excited, while Pat Gellzinger of Intel describes it as a bubble that hasn't burst yet. Nvidia's stock increased as a result of TSMC's positive Q3 earnings, which confirmed the company's solid factory orders for its data center GPUs.
The traders appeared pleased as the outcomes eased short-term supply concerns and increased institutional and retail investors trust in AIdriven hardware purchasing. TSMC recently reported a record-breaking quarter. The semiconductor manufacturer posted a net profit of NT452.3 billion or 14.7 billion, setting a new record and a staggering 39% increase over the previous year.
Additionally, revenue substantially above Wall Street projections, rising nearly 30% year-over-year to about $33.1 billion. Following this trend, TSMC increased its forecast for revenue growth in 2025 to the mid-30% range in US dollars, citing very strong demand for AI chips as the reason. It should come as no surprise that 74% of TSMC's wafer income currently comes from advanced chip nodes, which power those AI data center GPUs.
To put it briefly, the most significant chipmaker in the world is not only reaping the benefits of the AI boom, but also contributing to it. This outstanding performance shows that businesses like Nvidia, which depend on TSMC's state-of-the-art manufacturing, are benefiting greatly from AIdriven investment.
Since TSMC is the primary foundry for Nvidia's most cuttingedge GPUs, the Taiwanese chip giant's positive outlook is fantastic news for Nvidia stock. Simply put, TSMC's success typically indicates that Nvidia's chip orders in production are doing well as well. Along with advances in the larger semiconductor industry, Nvidia's stock surged between 1 and 1.5% immediately after TSMC released its blowout findings.
Any concerns about a short-term slowdown in demand were allayed by TSMC's optimistic guidance, which also reassured investors that Nvidia's advanced chip orders are still coming in steadily. Bullish feeling surrounding Nvidia and the larger AI hardware market was further bolstered by CEO CC's statement that AI demand is still very strong.
Investors are highly interested in a few items going forward, including TSMC's capital spending plans, Nvidia's upcoming results and forecast, and the rate at which GPU shipments ramp up in the upcoming quarters. As worldwide investment on AI infrastructure continues to rise, TSMC and NVIDIA's close cooperation, which was forged during the AI hardware boom, is expected to remain vital. .
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