Nvidia's plan to invest up to $100 billion in OpenAI to help it train and run its latest artificial-intelligence models has stalled after some inside the chip giant expressed doubts about the deal, th... ...

Core Insights - Nvidia CEO Jensen Huang has privately downplayed the likelihood of finalizing the original deal, indicating a cautious outlook on the agreement's completion [1] - Despite the uncertainty surrounding the deal, Nvidia and the other company will maintain a close collaboration moving forward [1] Company Summary - Nvidia's leadership is signaling a more reserved approach regarding the potential deal, which may affect investor sentiment and market expectations [1] - The ongoing collaboration between Nvidia and the other company suggests that both parties see value in working together, even if the original deal does not materialize [1]

Group 1 - NVIDIA's CEO Jensen Huang attended the company's year-end party in Taiwan, highlighting the collaboration with MediaTek to develop the N1 series processor, which is designed for powerful AI computers with low power consumption [1] - The theme of the year-end party was "NVIDIA Shines," and Huang expressed gratitude for the hard work of employees and the support from Taiwanese partners, noting the rapid growth of NVIDIA's operations in Taiwan [1] - NVIDIA's product offerings have expanded from GPUs to include network chips, switch chips, smart data processors, and CPUs, with future plans to launch the world's smallest AI supercomputer, DGX Spark, in collaboration with MediaTek [1] Group 2 - Huang discussed the development of quantum computing, emphasizing that while quantum computing can simulate nature, traditional CPUs and GPUs are still essential, and AI will remain a crucial computational model [2] - NVIDIA is working on integrating GPU and QPU technologies to create hybrid supercomputers, with significant breakthroughs in quantum bit error correction expected to lead to practical applications in the coming years [2] - Huang mentioned his meetings with supply chain partners in Taiwan, with expectations for a significant gathering referred to as the "Trillion Dinner," attended by high-level executives from the supply chain, including Foxconn's chairman [2]

Group 1 - OpenAI and Anthropic are accelerating their timelines towards potential 2026 initial public offerings, which may prevent a near-term slowdown in AI infrastructure spending, benefiting companies like Nvidia, Amazon, and Microsoft [1] - OpenAI needs to demonstrate technical dominance to justify a "frontier leader" narrative for its IPO, while Alphabet is currently favored to hold the "best model" title, creating pressure for private labs to invest heavily in compute [2] - The IPO pressure may shift behavior in the AI infrastructure sector, making compute a primary lever for valuation growth, thus maintaining an "accelerating" regime in AI infrastructure [3] Group 2 - Amazon is reportedly in talks to invest up to $50 billion in OpenAI, indicating a potential strategic shift in cloud partnerships as OpenAI seeks to diversify its infrastructure beyond Microsoft [4] - A significant change in Polymarket odds away from Google could signal a narrative shift, and a confirmed multi-billion dollar investment from Amazon would likely alter the competitive landscape for cloud providers [5]

Core Insights - The year 2026 has begun with notable cross-asset volatility due to rising geopolitical risks, late-cycle monetary uncertainty, and uneven earnings visibility, leading to sharp sector and asset-class rotations rather than broad sell-offs [1] Precious Metals - Gold has traded above $5,300/oz and silver exceeded $110/oz in January, marking one of the strongest monthly starts in decades, with gold up approximately 23% in January, its best monthly performance since the 1980s [2] - In 2025, gold rose 65.2% and silver more than 150%, significantly outperforming global equities, while gold-mining equities gained 166.4%, compared to a 23.1% increase in the FTSE All-World Index [3] Earnings Outlook - Despite macroeconomic stress, the mean earnings-per-share (EPS) estimate for the Zacks S&P 500 Composite indicates a growth of 29.3% in 2026, with capital rotating towards assets with pricing power and strong balance sheets [8] AI Capital Expenditure - Companies are increasing long-term investments in AI data centers, advanced semiconductors, and cloud infrastructure, making this spending a strategic necessity rather than a discretionary upgrade [9][10] Sector Positioning for 2026 - Selective sector allocation is recommended for 2026, focusing on three standout sectors: AI infrastructure and semiconductors, precious metals and gold-linked equities, and energy and critical materials [11] AI Infrastructure & Semiconductors - Capital is concentrating in companies with AI capacity, with NVIDIA and Micron Technology emerging as key beneficiaries, projected to report earnings growth of 57.1% and 298.7% respectively in their upcoming fiscal years [12] Precious Metals & Gold-linked Equities - Gold-mining equities are outperforming bullion due to higher realized prices and disciplined capital expenditure, with Newmont and Barrick projected to report earnings growth of 20.8% and 45% respectively in 2026 [14] Energy & Critical Materials - The demand for electricity and key inputs like copper and nickel is accelerating due to AI data centers, with utilities like NextEra expected to report earnings growth of 7.8% in 2026 [16]

Core Insights - NVIDIA Corporation (NVDA) and Taiwan Semiconductor Manufacturing Company Limited (TSMC) have experienced significant stock price increases of 59.9% and 62% respectively over the past year, driven by strong demand for AI technologies and easing trade tensions [1][2]. TSMC Insights - TSMC is expected to see continued growth due to strong demand for its advanced process technologies, projecting revenues of $34.6 billion to $35.8 billion for Q1 2026, which represents a 25.5% year-over-year increase and a 1.9% sequential rise [3][4]. - The company's gross profit margin for Q1 2026 is anticipated to be between 63% and 65%, slightly up from 62.3% in Q4 2025, driven by increased demand from AI hyperscalers [4]. - TSMC's earnings growth is projected at 46.2% for the current quarter and 29.1% for the full year, with a Zacks Consensus Estimate for EPS of $14.01 indicating a 27.1% year-over-year growth [5]. - Analysts are optimistic about TSMC's stock, with an average short-term price target of $408, suggesting a 19.2% increase from the last close, and a highest target of $520 indicating a potential upside of 51.9% [6]. NVIDIA Insights - NVIDIA is positioned for growth due to eased U.S.-China trade tensions, allowing selective Chinese tech companies to purchase its H200 AI chips, which could enhance its market presence in the region [10][11]. - The company anticipates revenues of nearly $65 billion for the fiscal fourth quarter of 2026, with expected earnings growth rates of 70.8% for the current quarter and 55.9% for the full year [12][13]. - The Zacks Consensus Estimate for NVIDIA's EPS is $4.66, reflecting a year-over-year growth of 10.7% [13]. - Brokers project an average short-term price target for NVDA stock at $254.81, indicating a 33.1% increase from the last closing price, with the highest target at $352 suggesting an upside of 83.8% [15].

Group 1: Federal Reserve and Market Reactions - President Trump has nominated Kevin Warsh as the next Chair of the Federal Reserve, which is causing market reactions as investors speculate on his hawkish monetary policy stance [1][45]. - The market is currently experiencing a mixed picture, with the S&P 500 down approximately 0.5% and the NASDAQ 100 off by 0.6% [2][46]. - There is a notable concern regarding the impact of rising memory prices on tech companies, particularly Apple, which has reported record quarterly sales but faces investor anxiety over future gross margins [1][17]. Group 2: Apple and Memory Prices - Apple has delivered record quarterly sales, exceeding expectations, but is facing challenges due to rising memory prices, which CEO Tim Cook expects to significantly impact gross margins [17][51]. - The tight supply of memory chips is expected to persist, with analysts indicating that prices will remain higher than usual due to extremely high demand and limited producers [15][56]. - Despite strong sales, there is concern about Apple's ability to navigate future challenges, particularly with forecasts predicting a potential 1% drop in the smartphone market in 2026 [51][54]. Group 3: AI and Economic Implications - Kevin Warsh believes that AI will serve as a significant disinflationary force, improving productivity and potentially doubling standards of living within a generation [5][6]. - There is ongoing debate about the impact of AI on labor and the broader economy, with some experts expressing skepticism about the deflationary effects of AI amidst persistent inflationary pressures [10][12]. - The tech industry is closely monitoring how AI developments will influence market dynamics and regulatory frameworks, especially in light of Warsh's potential leadership at the Fed [4][7]. Group 4: SpaceX and Potential Mergers - SpaceX is reportedly considering a merger with Tesla or AI firm XAI, driven by investor interest in consolidating operations [28][29]. - The potential merger could streamline operations and enhance synergies between the companies, which already have a strong collaborative relationship [30][32]. - However, there are significant regulatory hurdles that could complicate any merger discussions, given the scale of the companies involved [33][34]. Group 5: Amazon and AI Investments - Amazon is reportedly in talks to invest $50 billion in OpenAI, aiming to strengthen its position in the AI market [41][42]. - This investment reflects Amazon's desire to enhance its AI capabilities and compete more effectively with rivals like Microsoft and Oracle [41][43]. - The evolving landscape of AI is leading to a shift in how companies approach partnerships and investments, with a focus on securing access to cutting-edge technologies [43][44].

Core Viewpoint - Nvidia's stock has significant potential upside driven by increasing spending on AI infrastructure and its dominant position in the AI chip market [1][2]. Industry Insights - Spending on AI infrastructure is expected to rise, with Taiwan Semiconductor Manufacturing projecting AI chip revenue growth at a mid-to-high 50% annually through 2029 [1]. - Ark Invest forecasts that data center capital expenditures will triple to approximately $1.4 trillion by 2030 [1]. Company Performance - Nvidia holds about 90% market share in the GPU market, which is crucial for powering AI workloads [2]. - The company's networking portfolio revenue surged 162% last quarter to $8.2 billion, significantly outpacing its 56% compute revenue growth [3]. Financial Projections - Nvidia is projected to generate $213.4 billion in revenue for the fiscal year ending in January, with a potential revenue compound average growth rate of 37.5% through 2031, leading to an estimated revenue of around $1.4 trillion [4]. - If adjusted operating expenses rise at an average of 7% quarter over quarter and gross margins remain at approximately 73%, Nvidia could generate over $792 billion in adjusted earnings by 2031, translating to about $32.50 per share [5]. - A forward price-to-earnings ratio of 20 to 25 on fiscal 2032 projections could place Nvidia's share price between $650 and $815 by the end of 2030 [5]. Revenue and Earnings Growth Model - Projected revenue growth from FY2027 to FY2032 shows a steady increase, with revenue reaching $1.42 trillion by FY2032 and earnings per share growing to $32.58 [7].

Core Insights - The demand for custom chips, particularly from Broadcom, is increasing among hyperscalers for building advanced AI models, with Google utilizing Broadcom's tensor processor units (TPUs) for its Gemini AI project [1] - Nvidia remains a dominant player in the AI chip market, with its GPUs being essential for many companies, including Google, despite the rise of custom chips [1] - Broadcom's AI revenue has surged by 65% year-over-year to $20 billion, contributing to a record semiconductor revenue of $37 billion for the company [1] Company Analysis - Google has been developing TPUs for over a decade and is now offering them to cloud customers, positioning itself as a competitor to Nvidia in the AI chip space [1] - Nvidia's CEO has downplayed the threat from custom chips, asserting that Nvidia's versatility allows it to address a broader market than just AI [1] - Broadcom's recent custom chip deal with OpenAI highlights the trend of diversification in the chip market, although Nvidia's market share is expected to remain strong [1] Market Dynamics - Analysts suggest that Nvidia will maintain over 50% market share for at least the next five years, with a buy rating and a price target of $250 per share [1] - Broadcom's position in the custom chip market is considered more fragile, primarily due to its reliance on Google as a major customer [1] - Wolfe analysts predict that Google's willingness to make TPUs available to third parties could create significant competition for Nvidia, with an estimated 7 million TPU shipments by 2028 [1]

Dr. Michael Burry, the man made famous from The Big Short, has had a lot of things to say in recent months. ...