Core Viewpoint - Goldman Sachs maintains a "buy" rating on Nvidia, expressing extreme optimism for the company's performance in 2026, despite short-term downward pressure on stock prices following the second-quarter earnings report [1] Group 1: Future Earnings Projections - Goldman Sachs sets Nvidia's 2026 earnings per share (EPS) estimate significantly above Wall Street consensus, approximately 10% higher, supported by three core reasons [1] - The next-generation platform "Rubin" is expected to enter mass production by mid-2026, with all six chips in the platform currently in trial production, indicating a substantial performance and efficiency improvement over the previous generation [2] Group 2: Customer Diversification - Nvidia's customer base is diversifying, reducing reliance on a few large cloud service providers (CSPs), with large CSPs currently accounting for 50% of data center revenue, highlighting the rise of other customer segments [3] - Revenue from sovereign AI projects is projected to exceed $20 billion in 2025, more than doubling from 2024, reflecting a growing demand for autonomous AI infrastructure globally [3] Group 3: Growth Drivers - Nvidia's potential for significant growth in 2026 is driven by increased spending from large-scale cloud service providers and demand from non-traditional customers, creating a "dual-driver" scenario for future revenue and profit growth [4] - Despite short-term challenges, Nvidia's long-term growth logic remains strong, with 2026 anticipated as a key year for explosive growth [6]

Core Insights - Nvidia holds a significant share in AI training and inference markets, but competition from hyperscale computing companies developing their own XPU raises questions about sustainability [1] - Broadcom and Marvell are positioned to benefit from the demand for custom CPUs and XPUs, collaborating with major cloud providers like AWS, Google, Meta, and Microsoft [2][3] - The cost-effectiveness of these custom solutions must be significantly lower than existing offerings from Intel, AMD, Nvidia, and AMD to be viable [3] Financial Performance - Broadcom reported Q1 FY2025 sales of $14.92 billion, a 24.7% increase year-over-year, with profits reaching $5.5 billion, up 4.2 times from the previous year [5] - Marvell's Q4 FY2025 sales were $1.82 billion, a 19.9% quarter-over-quarter increase, with a net income of $200 million, marking a significant turnaround from previous losses [16] AI Revenue Growth - Broadcom's AI chip sales reached $4.12 billion in Q1 FY2025, a 77% year-over-year increase, while other semiconductor sales declined by 19.2% [11] - Marvell's AI revenue for FY2025 is projected to be around $1.85 billion, with expectations to exceed $3 billion in FY2026, driven by custom AI XPU and optical products [18][20] Market Dynamics - The IT industry is characterized by demanding clients seeking high service levels at low costs, which influences the pricing and development of custom CPUs and XPUs [3] - Broadcom's AI business is comparable in scale to Marvell's entire business, but Marvell's data center segment is rapidly growing [3][5] Future Outlook - Broadcom anticipates stable revenue of $14.9 billion for Q2 FY2025, with a projected 19.3% year-over-year growth [14] - Marvell's success in securing new hyperscale clients and developing shared AI XPU designs will be crucial for future revenue growth [20]