Gene Munster, managing partner at Deepwater Asset Management, offered a compelling assessment on Thursday that fresh developments from Nvidia Corporation (NASDAQ:NVDA) and its principal chip supplier Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) point to an accelerating trajectory for artificial intelligence (AI) demand extending into 2026. This outlook contrasts with some prevailing market sentiments that anticipate a deceleration.
Utilizing his platform on X (formerly Twitter), Munster emphasized that various key indicators present a narrative of AI infrastructure growth that could outperform Wall Street estimates this year. In particular, he forecasted that Nvidia’s revenue might experience growth exceeding 65% year over year by 2026, significantly ahead of the approximately 50% average analyst consensus.
Describing the evidence as a "2-for-2" confirmation for sustained momentum, Munster underlined that both company-specific updates systematically align with this bullish outlook, reinforcing his conviction on AI's growth prospects.
Nvidia’s Management Signals Upward Demand Potential
Munster cited commentary from Nvidia’s executive team delivered at the Consumer Electronics Show (CES) as a primary component of his thesis. According to Munster’s analysis, Nvidia’s leadership exuded confidence that AI infrastructure demand could outstrip existing analyst models, hinting at the possibility that consensus growth predictions may be conservative. This tone indicates a healthy enterprise and data center AI expenditure climate, which forms the backbone of the AI growth narrative.
TSMC’s Earnings Guidance Adds Credence to Growth Outlook
Further reinforcing this interpretation, Munster referenced the most recent guidance from Taiwan Semiconductor Manufacturing, a crucial supplier in the AI chip manufacturing ecosystem. TSMC forecasted its revenue for the first quarter of 2026 to lie between $34.6 billion and $35.8 billion, surpassing the market's expectation near $33.2 billion.
The stock market responded positively; TSMC’s shares appreciated 4.44% during regular trading hours on Thursday and continued to edge up by 0.47% in after-hours trading, based on data from Benzinga Pro. Nvidia also gained traction with a 2.10% increase during the same session, followed by an additional 0.39% after hours.
Munster interpreted these market movements as affirmation, suggesting that TSMC's revenue is projected to rise approximately 40% year over year in the March 2026 quarter, which further supports Nvidia’s optimistic outlook.
TSMC Reports Robust Q4 Performance
TSMC’s fourth-quarter results exceeded expectations globally on earnings, margins, and outlook metrics. The company reported a gross margin of 62.3%, outpacing the consensus estimate of 60.6%. Earnings per share (EPS) reached $3.09, surpassing the forecasted $2.90.
Revenue hit a record $33.1 billion, marginally above the Wall Street projection of $33 billion, signaling strong business demand.
Market apprehensions regarding a potential AI bubble have diminished following TSMC’s solid quarterly report and noteworthy margin levels. CEO CC Wei stated emphatically that "AI is real," underscoring that the company’s High-Performance Computing segment now accounts for 55% of total revenue, highlighting the substantial role of AI-related demand within its business.
Market Sentiment and Stock Performance
According to Benzinga's Edge Stock Rankings, TSMC demonstrates a favorable price trend across short, medium, and long-term horizons. However, the firm holds a weak Value rating, reflecting certain valuation concerns relative to fundamentals.
Conclusion
Overall, the convergence of confident guidance from Nvidia, positive earnings beats from TSMC, and strong stock market reactions underpin an emerging consensus that AI infrastructure demand is more resilient and possibly expanding faster than the current Wall Street estimates. While uncertainties remain in broader market dynamics, these developments provide a robust foundation for expecting AI-driven growth to remain a vital catalyst in the semiconductor and technology sectors heading into 2026.