Nvidia’s Key Supplier Signals Unwavering AI Demand

A major update from Taiwan provided significant momentum for Nvidia’s stock on Thursday. Taiwan Semiconductor Manufacturing Co. (TSMC), the chipmaker’s primary manufacturing partner, not only posted record-breaking quarterly results but also delivered a powerful message to the market through a substantial increase in its capital expenditure plans. This development has alleviated recent investor concerns about a potential slowdown in artificial intelligence demand, refocusing attention on the growth outlook for 2026.

Unprecedented Investment Points to Sustained Boom

Perhaps more telling than the current financial figures is TSMC’s forward-looking commitment. The world’s leading contract manufacturer announced plans to raise its capital expenditure budget for 2026 to a range of $52 to $56 billion. This represents a minimum increase of 25 percent compared to the prior year. Market observers interpret this aggressive expansion strategy as a clear indicator that the manufacturer is banking on a prolonged boom in AI infrastructure. Analysts at JPMorgan noted that these planned expenditures significantly exceed the peak levels seen in previous industry cycles.

Quarterly Report Dispels “AI Bubble” Concerns

The catalyst for Nvidia’s share price advance to $187.05 was TSMC’s quarterly earnings release. The chip foundry giant substantially outperformed analyst expectations, with its High-Performance Computing segment—which encompasses AI chips—driving the majority of profit growth. This performance is crucial for Nvidia: full capacity utilization at its manufacturer suggests enduring demand for Nvidia’s AI accelerators. Furthermore, TSMC’s management countered fears of an “AI bubble,” characterizing the demand based on customer feedback as “real.”

Should investors sell immediately? Or is it worth buying Nvidia?

Wall Street Analysts Reinforce Bullish Stance

The news from Taiwan prompted an immediate response on Wall Street. Several research firms, including Wolfe Research and Bernstein, reaffirmed their positive stance on Nvidia. Among their supporting arguments, they cited the stock’s attractive valuation relative to its industry peers. While trading near its all-time highs and within sight of its 52-week peak of $190.53, analysts continue to highlight the company’s dominant market position and the upcoming launch of new platforms such as “Vera Rubin.”

The true test of this market optimism will come on February 25, 2026. On that date, Nvidia is scheduled to report its fourth fiscal quarter results, for which it has previously projected revenue of approximately $65 billion.