Nvidia(US:NVDA) Ge Long Hui·2026-01-02 08:02Core Insights - The article emphasizes that AI is reshaping the global economy, with 75% of the S&P 500's gains, 80% of profits, and 90% of capital expenditures directly linked to the AI industry [1] - NVIDIA has evolved from being merely an "AI chip leader" to becoming the "master architect" of computational power, defining rules and monopolizing the industry [1] Group 1: Demand Side - The demand for computational power is exploding exponentially, driven by a virtuous cycle of resource availability leading to advanced model development and increased application scenarios [4] - NVIDIA's data center revenue reached $51.2 billion, a 66% year-over-year increase, indicating long-term structural growth rather than short-term fluctuations [4] - Major cloud service providers are engaged in an unprecedented "arms race" for capital expenditure, with Microsoft, Amazon, Google, Meta, and Oracle significantly increasing their investments [9][10] Group 2: Supply Side - NVIDIA is not just a hardware manufacturer but has evolved into a system-level giant with a unique ecosystem combining CUDA software, GPU hardware, and networking [12] - The CUDA ecosystem is a critical competitive barrier, ensuring that most accelerators lacking CUDA support will be phased out [13] - NVIDIA's networking business has become the largest AI network segment, with quarterly revenue doubling to $8.2 billion, enhancing its full-stack solution offering [14][15] Group 3: Product Iteration and Supply Chain - NVIDIA's rapid product iteration, particularly the transition from Hopper to Blackwell, is a key factor in maintaining its competitive edge [19] - The Blackwell platform is expected to generate $500 billion in revenue visibility from early 2025 to the end of 2026, significantly surpassing the revenue from the Hopper platform [21] - NVIDIA's deep collaboration with TSMC to expand packaging capacity is crucial for meeting its explosive demand, with TSMC's capacity expected to reach 105,000 units per month by the end of 2026 [25][26] Group 4: Financial Performance and Valuation - NVIDIA reported $57 billion in revenue for FY26Q3, a 62% year-over-year increase, with an adjusted net profit of $31.7 billion, reflecting strong growth [31] - The adjusted gross margin is at 73.6%, with expectations to maintain around 75% in FY27, showcasing strong pricing power [32] - Analysts have raised NVIDIA's target price significantly, with projections indicating a market cap potential of $4.56 trillion to $6.38 trillion based on future earnings growth [35][36]