Demand for AI is not slowing down as data centers keep expanding. Therefore, investors are wondering what the odds are that the AI sector is currently overestimated.
Broadcom already looks like a monopolist: analysts at KeyBanc call it the “dominant AI ASIC supplier”, not without reason — the company is preparing to deliver server facilities for Google, ByteDance, Meta, OpenAI, and Apple. Yes, the entire tech Olympus is lining up for chips.
The $10 billion OpenAI deal is putting some pressure on margins, but as they say in the market, “a hit to profits is a boost to legend.” Broadcom is tightening its grip on AI infrastructure, pumping up its revenue at a brisk pace.
Nvidia is still operating in “every quarter is a record” mode. KeyBanc expects the company to beat expectations yet again and raise its forward guidance, driven by huge hyperscaler demand.
The GB200 and GB300 are ramping up, CoWoS is expanding its packaging footprint, and the RTX6000D is making its way back to China. According to KeyBanc, we are looking at 30,000 server racks this year and 50,000 next year.
While everyone is discussing chips, Monolithic Power Systems is quietly increasing its share on Nvidia’s B300 HGX platform from 30% to 50%.
Besides, MPWR is profiting off those who profit from AI. Revenue growth in Enterprise Data is easing past concerns, and now MPWR looks like a key beneficiary of Nvidia’s hardware cycle. Sometimes being the “second name” is even more beneficial.
Silicon Labs is bouncing back — not from stress, but from low cycles. New nonstop glucose monitoring devices are gaining more approvals. So, production of smart meters and electronic shelf labels is picking up speed.
