Nvidia CEO’s Demand from TSMC: A Boost for This Portfolio Holding

Every weekday, the CNBC Investing Club reveals its market insights just in time for Wall Street’s final trading hour. Here’s the Homestretch report.

Market Overview: The S&P 500 rallied nearly 1.5% on Monday, fueled by optimism as House members returned to Washington to vote on a Senate agreement aimed at ending the prolonged government shutdown. The Nasdaq Composite outperformed, surging over 2%. These gains effectively recouped most of the losses incurred the previous week.

The potential resolution of the 41-day shutdown – which has disrupted air travel and negatively impacted consumer confidence – injected a risk-on sentiment into the market. For instance, Club holding Nvidia jumped almost 5% after taking a 7% hit last week in a tech selloff driven by valuation concerns surrounding AI-related stocks.

The rally extended beyond the tech sector, with consumer discretionary and materials sectors exhibiting strength. Eight out of the eleven S&P 500 sector indices closed higher, with only real estate, utilities, and consumer staples lagging behind.

Nvidia’s Wafer Demand Signals Broader Chip Market Health: Nvidia CEO Jensen Huang recently indicated to Taiwan Semiconductor Manufacturing Company (TSMC), a key manufacturing partner, that he expects them to ramp up wafer production. This statement strongly suggests that Nvidia anticipates sustained robust demand for its AI chips, aligning with Huang’s “$500 billion in order visibility” comment made at the company’s GTC event a few weeks prior.

While this is undeniably positive news for Nvidia, the mention of “wafers”—the fundamental building blocks of semiconductor chips—immediately draws attention to Qnity Electronics, a recent DuPont spinoff. CEO Jon Kemp has consistently emphasized that wafer starts are the most reliable indicator of demand. Wafer starts represent the number of new semiconductor wafers initiating the manufacturing process in a fabrication plant (fab).

During the October Investor Day event, Kemp stated, “Wafer starts, which are tracked by MSI data, are one of the best indicators of demand for our products. You can see wafer starts have grown steadily with a long-term compound annual growth rate in the mid-single digits, demonstrating consistent positive growth.” He also mentioned, “Global fab capacity has steadily expanded to keep pace with that demand, increasingly driven by investments at the leading edge, which will approach $200 billion or more in coming years.” This investment underscores the capital-intensive nature of the semiconductor industry and the constant need for upgrades to maintain a competitive edge in manufacturing advanced chips.

Adding weight to this perspective, the SEMI Silicon Manufacturers Group (SMG), a provider of market data for the silicon industry, reported last week that worldwide silicon wafer shipments increased by 3.1% year-over-year in the third quarter of 2025. This growth was primarily driven by increased demand to support AI applications. SEMI projects continued steady growth in global shipments through 2028.

Qnity’s stock is up about 6% Monday, mirroring the rebound in other AI-related stocks. However, it remains uncertain to what extent this move is directly attributable to Huang’s comments. Qnity’s trading activity has been notably volatile since the spin-off was finalized last week.

Looking Ahead: We will monitor developments in Washington to see if an agreement will be reached to reopen the government. Paramount Skydance, CoreWeave, Rigetti Computing, AST SpaceMobile, Rocket Lab, and Occidental Petroleum are among the companies scheduled to report earnings after the market close. Nebius Group and Sea Limited will report earnings before the market opens on Tuesday.

Disclaimer: The Investing Club is a service that provides insights and educational content but does not offer personalized investment advice. Investors should conduct their own due diligence and consult with a financial advisor before making any investment decisions.