AI infrastructure spending is constrained by limited leading-edge wafer supply, largely controlled by TSMC. This supply bottleneck limits NVIDIA’s near-term revenue ceiling but also helps prevent a classic capex bubble. Scarcity preserves pricing power and disciplines customer behavior, supporting NVIDIA gross margins and cycle durability. TSMC’s measured capacity expansion is framed as enabling the AI buildout rather than stalling it. NVIDIA’s recent results show tight supply conditions, with strong data center revenue and very high non-GAAP gross margins. CEO commentary indicates Blackwell sales are extremely strong and cloud GPUs are sold out, reflecting rationing rather than oversupply.
"“If Taiwan Semi did what Jensen wanted, Nvidia could sell $2 trillion of GPUs in 2026 or 2027,” he stated. NVIDIA generated $215.94 billion in revenue in fiscal 2026, which puts that hypothetical roughly an order of magnitude above the current run rate."
"“I've been optimistic that the fundamental shortage of wafers, which is really controlled by Taiwan Semi, will prevent a bubble,” he asserted. Scarcity preserves pricing power and disciplines customer behavior, protecting NVIDIA's gross margins and cycle durability."
"The company reported Q4 FY2026 revenue of $68.13 billion, with data center revenue of $62.31 billion and non-GAAP gross margin of 75%. NVIDIA CEO Jensen Huang described an environment where “Blackwell sales are off the charts, and cloud GPUs are sold out,” language pointing directly at supply rationing."
Read at 24/7 Wall St.
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