Nvidia Steady as SK Hynix Posts $25.1B Q1 Profit; Nvidia Growth Outpaces TSMC
Nvidia shares held steady after supplier SK Hynix posted a record Q1 operating profit of $25.1 billion and warned AI chip demand will exceed capacity for the next three years. Nvidia's 73% revenue growth outpaces TSMC's 41%, supporting forecasts it will keep its valuation premium over rivals like Google.
1. SK Hynix's Record Q1 Profit and Capacity Constraints
South Korea’s SK Hynix posted a record Q1 operating profit of just over $25 billion, more than five times last year’s figure, driven by surging demand for high-bandwidth memory chips used in AI. The company warned that client orders over the next three years already exceed current production capacity, prompting it to accelerate expansion plans, including advancing a new South Korea plant, while measures to secure inventory and diversify suppliers aim to offset risks from global conflicts.
2. Nvidia's Growth Advantage and Valuation Lead
Nvidia’s revenue surged 73% year-over-year in Q1, reinforcing expectations that it will maintain a valuation premium over peers. By contrast, TSMC grew revenue 41% year-over-year, underscoring Nvidia’s ability to outpace major foundries even as competition from companies like Google intensifies in the AI chip market.