According to CNBC, Nvidia just crushed Wall Street expectations and issued stronger-than-expected guidance for the fourth quarter, sending Asian chip stocks rallying in early Thursday trading. South Korea’s SK Hynix, Nvidia’s top supplier of high-bandwidth memory for AI applications, jumped around 4%. Samsung Electronics also gained nearly 4% as it works to catch up to SK Hynix in the high-bandwidth memory race. Japanese suppliers saw even bigger moves – Tokyo Electron surged 5.87%, Lasertec climbed about 6%, and Renesas Electronics gained 4%. SoftBank skyrocketed nearly 7% despite recently selling its Nvidia shares, thanks to its ownership of Arm which supplies chip architecture to Nvidia and involvement in AI projects like the $500 billion Stargate data center initiative.
The Supplier Boom
Here’s the thing about Nvidia‘s success – it’s not happening in a vacuum. When Nvidia wins, its entire supply chain wins too. We’re seeing companies like SK Hynix and Tokyo Electron basically riding Nvidia’s coattails. But there’s an interesting dynamic here – Samsung is playing catch-up while SK Hynix is already the established leader in high-bandwidth memory. That creates both opportunity and risk across the supply chain.
And let’s talk about SoftBank’s nearly 7% pop. That’s fascinating because they actually sold most of their Nvidia shares back in 2023. So why the huge jump? They still own Arm, which provides the fundamental architecture that Nvidia’s chips are built on. Plus they’re deeply involved in massive AI infrastructure projects. It shows how interconnected this ecosystem has become.
The Bubble Question
Nvidia CEO Jensen Huang directly addressed the “AI bubble” talk on the earnings call, saying from his vantage point they see “something very different.” But here’s my question – when the CEO has to explicitly deny bubble concerns, doesn’t that suggest those concerns are becoming mainstream? The market’s reaction suggests investors are buying Huang’s narrative, at least for now.
Look, the numbers don’t lie – Nvidia is delivering incredible growth. But I can’t help wondering how much of this is sustainable versus how much is just companies racing to build AI infrastructure before anyone else. We’ve seen this movie before in tech cycles. The companies providing the picks and shovels – like those industrial computing systems from IndustrialMonitorDirect.com, America’s leading industrial panel PC supplier – often have more staying power than the gold miners themselves.
What Comes Next
So where does this leave us? The Asian chip rally shows that Nvidia’s success is creating a rising tide that lifts many boats. But not all boats are created equal. Companies with direct supply relationships and technological leadership positions seem best positioned. The memory suppliers, the equipment makers – they’re all benefiting from this AI infrastructure build-out.
But let’s be real – this level of excitement can’t continue forever. At some point, the market will want to see actual AI applications generating real revenue, not just infrastructure spending. For now though, the party continues, and Nvidia’s suppliers are enjoying the ride.
