Rivian's plan to ship an in-house autonomy chip is another sign that customers want options beyond Nvidia.Rivian's (RIVN 4.28%) Autonomy & AI Day last week put a wrinkle into the Nvidia (NVDA +0.99%) growth story.Rivian, which specializes in electric trucks and SUVs, said it plans to ship a new autonomy computer on its R2 vehicles starting at the end of 2026, built around an in-house chip designed to run its self-driving software.Rivian is not a major Nvidia customer, so this is not about lost revenue today ...

Core Viewpoint - Nvidia and TSMC are highlighted as leading tech stocks to consider for investment as the market momentum continues into 2026, driven by strong performance in the tech sector [1] Nvidia - Nvidia maintains over 90% market share in the GPU data center space, solidifying its position as a leader in AI infrastructure despite facing increased competition [2] - The main challenge for Nvidia comes from custom AI ASICs, which are more energy-efficient but lack the flexibility of GPUs [4] - Nvidia's GPUs are readily available at scale, and the company collaborates closely with TSMC to secure future supply to meet rising demand [6] - Nvidia predicts that data center capital expenditures could reach $4 trillion by 2030, positioning the company to capture significant market share [7] - The stock is attractively priced with a forward P/E ratio under 24.5 times 2026 estimates and a PEG ratio below 0.7, indicating potential undervaluation [7] Taiwan Semiconductor Manufacturing (TSMC) - TSMC is the largest semiconductor contract manufacturer globally and benefits from the struggles of its rivals, being part of an oligopoly with Samsung and Intel [8] - TSMC has consistently produced chips at small node sizes with low defect rates, with 60% of its revenue coming from chips at 5nm nodes or below [10] - The company is expanding capacity by building new fabs and is expected to raise prices next year due to strong pricing power [11] - TSMC is set to introduce its new 2nm node technology, projected to cost 50% more than its 3nm technology, contributing to future growth [11] - The stock is also attractively valued with a forward P/E of 24 times, making it a solid buy given its growth outlook [12]

Core Viewpoint - Broadcom is positioned to be the leading chip stock in the market next year, driven by the increasing demand for AI infrastructure and cloud computing solutions [1][2]. Group 1: Business Segments - Broadcom is a leader in data center networking, producing essential components like Ethernet switches and network interface cards, which are crucial for managing AI workloads [3]. - The company has expanded its infrastructure software business through acquisitions, with VMware being the largest acquisition, enhancing its cloud computing capabilities [4]. - Following the VMware acquisition, Broadcom has transitioned customers to a subscription model and is promoting its VMware Cloud Foundation platform for managing AI workloads [5]. Group 2: ASICs Opportunity - Broadcom's ASICs business presents significant growth potential, as these custom chips are more efficient for specific tasks compared to general-purpose chips [6]. - The company has collaborated with major clients like Alphabet to design tensor processing units, leading to increased interest in its ASIC solutions [7]. - A notable opportunity includes a $10 billion order from a potential customer, possibly Apple, for next year, alongside a projected $60 billion to $90 billion opportunity from three other major clients by fiscal 2027 [8]. Group 3: Major Contracts and Revenue Potential - Broadcom has secured a deal with OpenAI to supply 10 gigawatts of custom AI chips, valued at approximately $350 billion, to be fulfilled by the end of 2029 [9]. - This deal could translate to nearly $100 billion in annual chip sales, significantly boosting Broadcom's revenue [9]. Group 4: Valuation and Growth Prospects - Broadcom is currently trading at a forward P/E ratio of about 30 and a PEG ratio under 0.4, indicating it is undervalued given its growth prospects [10]. - The company is expected to experience strong growth next year, with explosive potential growth anticipated by fiscal 2027, likely leading to a significant stock rally [11].

Core Viewpoint - CoreWeave's stock has cooled off despite strong Q3 revenue growth, attributed to delays affecting its full-year guidance [1][4] Company Overview - CoreWeave is a neocloud company focused on AI workloads, leveraging a close relationship with Nvidia for access to advanced GPUs [2] - The company provides high-speed networking, storage, and managed software services [2] Financial Performance - In Q3, CoreWeave's revenue more than doubled from $583.9 million to $1.36 billion, surpassing analyst expectations of $1.29 billion [3] - The company lowered its full-year revenue guidance to $5.05 billion - $5.15 billion from a previous range of $5.15 billion - $5.35 billion due to a data center delay [4] - Operating cash flow for the quarter was strong at $1.69 billion, up from $641.2 million year-over-year, but free cash flow was negative at $1.6 billion due to nearly $3.3 billion in capital expenditures [6] Capital Expenditures and Financial Position - CoreWeave plans to more than double its capital expenditures next year [5] - The company ended the quarter with $1.9 billion in unrestricted cash and investments, alongside $14 billion in debt [6] Market Position and Competitive Landscape - CoreWeave's rapid revenue growth raises questions about the sustainability of its business model and the useful life of its AI hardware investments [7] - Compared to larger cloud players like Amazon, Microsoft, and Alphabet, CoreWeave faces more significant risks due to its scale and asset management [8] - Competitors like Alphabet and Amazon have developed custom AI chips, which may provide them with a competitive edge [9]

Core Insights - Majestic Labs, co-founded by former Meta and Google executives, has raised $100 million to develop technology aimed at reducing cloud companies' data center costs [1][2] - The startup's innovative silicon design architecture boasts 1,000 times the memory of typical enterprise-grade servers, potentially allowing one server to replace up to 10 conventional racks [2][7] - The company recently closed a $71 million Series A funding round, led by Bow Wave Capital, with additional investment from Lux Capital [3] Company Overview - Majestic Labs is focused on addressing memory capacity challenges in AI workloads, targeting hyperscalers and large enterprises in sectors like finance and pharmaceuticals [6][7] - The startup plans to release prototypes of its box servers by 2027 and is already discussing pre-orders with potential clients [8] - The company currently employs fewer than 50 people, with plans for growth and additional funding in the coming year [8][14] Industry Context - Major tech companies, including Alphabet, Meta, Microsoft, and Amazon, are increasing their capital expenditures for data center infrastructure, collectively expected to exceed $380 billion this year [4] - The reliance on Nvidia's GPUs for AI workloads is shifting, with new entrants like Google introducing their own tensor processing units (TPUs) [5][6] - The demand for AI technology is surging, prompting the co-founders of Majestic Labs to leverage their extensive experience in silicon and AI to address industry bottlenecks [9][13]

Core Insights - Broadcom is positioned to capitalize on the growing demand for custom AI chips, which could significantly enhance its stock value in the coming years [1][2] - The company has established itself as a key partner for businesses looking to design their own AI chips, moving away from reliance on traditional GPUs [1][8] Business Segments - Broadcom operates in two main segments: semiconductor solutions and infrastructure software, with a strong focus on networking equipment essential for data centers [3][5] - The semiconductor solutions segment includes the design of application-specific integrated circuits (ASICs), which are increasingly sought after for AI applications due to their efficiency [6] AI Market Opportunity - The demand for custom AI chips is rising as companies seek alternatives to expensive Nvidia GPUs, particularly for inference tasks that require ongoing processing [8] - Broadcom has successfully collaborated with major tech firms like Alphabet to develop tensor processing units (TPUs), leading to new partnerships with companies such as Meta Platforms and ByteDance [9][10] Revenue Projections - Analysts forecast Broadcom will generate $63.3 billion in revenue for fiscal 2025, with a potential market opportunity of $60 billion to $90 billion for AI chips by fiscal 2027 [11] - The company could see its revenue double to approximately $127 billion by fiscal 2027, driven by the demand for custom chips [12] Stock Valuation - Based on projected earnings of $14.80 per share in fiscal 2027, Broadcom's stock could be valued between $445 and $600 by the end of 2026, indicating a potential upside of 70% [13]