August 29, 2025 | NVIDIA is Mining The AI Gold Rush

The AI boom can be summed up in one ticker: NVIDIA (NVDA), now the world’s most valuable company at $4.3 trillion; commanding a record 8% of the S&P 500.

This week NVDA reported stellar results: $47B in quarterly revenue, with $41B from data centers. Most of that came from just three hyperscalers — Google, Amazon, and Microsoft — with Meta and Oracle rounding out the top five. Together, these giants are spending about $600B annually on AI infrastructure. NVDA takes about a third of that.

CEO Jensen Huang predicts AI capital spending could soon hit $1 trillion a year, boosting NVDA’s sales to $300–400B — up to double today’s levels. With 72% margins on its GPUs, the company looks unstoppable.

The Catch

NVIDIA doesn’t manufacture its chips. That job belongs to Taiwan-based Taiwan Semiconductor (TSMC), which is racing to a 2-nanometer standard — far ahead of the industry’s 3-7 nm baseline. Each chip contains millions of transistors packed tighter than DNA strands. Jensen Huang calls TSMC “one of the greatest companies in the history of humanity.” Last year TSMC’s revenue hit $30B, up 44%, and demand is expected to keep growing at 40% annually.

Risks on the Horizon

• China Challenge: Half the world’s AI researchers are in China. Beijing wants 70% of AI chips made at home by 2027, with Huawei and SMIC already pushing forward.
• Trump Tariffs: The U.S. administration is threatening tariffs of 100%+ on imported chips, pressuring TSMC to invest $165B in U.S. fabs. NVDA has even offered Washington 15% of chip sales to ease tensions. Other competitors like Intel and Korea-based Samsung are building massive new foundry capacity in the U.S.

The Crossfire

Caught between Washington and Beijing, NVDA sits at the center of the world’s most strategic tech battle. If China succeeds in matching its powerful GPUs — or if U.S. tariffs squeeze NVDA’s offshore supplier — the world’s priciest stock could see its valuation melt down fast.

Hilliard MacBeth

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Hilliard MacBeth August 29th, 2025

Posted In: Hilliard's Weekend Notebook

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