The rally reflects growing analyst confidence in steady demand for artificial intelligence chips. Investors hope the Broadcom report serves as a health check for the entire AI semiconductor supply chain.
Key Takeaways
Nvidia booked roughly $20 billion in profit over five months from an Intel investment.
Bernstein lifted its TSMC price target from $351 to $430 on May 18.
Broadcom earnings are viewed as a gauge of AI chip supply-chain health.
According to The Motley Fool, Nvidia invested $5 billion in Intel in December at $23.28 per share. Intel shares later climbed to $114.68 in May, generating about $20 billion in profit over five months.
That paper gain strengthens Nvidia's balance sheet beyond its core chip business. Since the start of 2023, Nvidia has added nearly $4.8 trillion in market value, The Motley Fool reported.
Nvidia's data center gross margin still holds in the mid-70% range, a sign of durable pricing power. As reported by The Motley Fool, supply chain advantages help the company keep profitability elevated.
The optimism rests on AI computing demand that has yet to show any meaningful slowdown. Per The Motley Fool, PwC analysts size the global AI opportunity at $15.7 trillion by 2030.
That figure helps explain why heavy data center spending by big tech keeps underpinning chip orders. Each new wave of demand lifts key suppliers such as Nvidia, Marvell, and TSMC together.
Analysts Stay Bullish On TSMC
The positive sentiment also extends to TSMC, the world's leading AI chip manufacturer. Strong demand for advanced process nodes is a key driver of analyst confidence.
According to Insider Monkey, Bernstein raised its TSMC price target from $351 to $430 on May 18. The firm also kept an Outperform rating on the stock.
Bernstein expects TSMC earnings per share to grow at a 28% compound annual rate over the next two-and-a-half years. The firm sees little evidence that rivals like Intel are closing the technology gap.
Per Insider Monkey, Bank of America reaffirmed its Buy rating on TSMC shares. BofA said recent concerns about the chipmaker's technological capabilities are overdone.
Nvidia's Intel stake is now evolving into a deeper infrastructure partnership between the two firms. Intel's x86 CPUs are entering Nvidia AI platforms, while Nvidia GPU chiplets are entering Intel chips.
The Broadcom report will test whether AI chip order momentum stays strong into the second half. A solid result could reinforce confidence across the broader semiconductor group.
For retail investors, this run of signals underscores strong momentum across the AI chip sector. The awaited Broadcom earnings report could set the tone for sentiment in the weeks ahead.
Gotrade is the trading name of Gotrade Securities Inc., which is registered with and supervised by the Labuan Financial Services Authority (LFSA). This content is for educational purposes only and does not constitute financial advice. Always do your own research (DYOR) before investing.
