NEW YORK, January 1, 2026, 15:07 ET
- Nvidia has approached TSMC to ramp up H200 AI chip output as Chinese firms place large 2026 orders, sources told Reuters.
- Investors enter 2026 after an AI-fueled 2025 rally, with strategists flagging a possible broadening beyond a narrow group of mega-caps.
- New U.S. and China moves on chip tools and equipment add fresh uncertainty to semiconductor supply and pricing.
Nvidia has approached Taiwan Semiconductor Manufacturing Co to ramp up production of its H200 artificial intelligence chips as Chinese technology companies place large orders for 2026, sources told Reuters. The push puts AI chip supply — and the politics around who gets it — back at the center of the 2026 outlook for Big Tech stocks. Reuters
The year begins after U.S. stocks posted another strong run in 2025, a period dominated by President Donald Trump’s tariff uncertainty and a rush into AI-related shares. The S&P 500 gained 16.39% in 2025 and the Nasdaq rose 20.36%, and Nvidia was up 39% and became the first publicly traded company to touch a $5 trillion market value, Reuters reported. Money managers have started to argue the next leg will depend on performance spreading more widely in 2026, including Jitania Kandhari, deputy CIO of the solutions and multi-asset group at Morgan Stanley Investment Management. Reuters
Late-December trading showed early signs of rotation rather than a straight-line replay of 2025’s winners. Meta shares rose after the Facebook and Instagram owner said it would acquire Chinese-founded AI startup Manus, while investors pared some technology exposure in holiday-thin trade. “The growth rates are going to converge between technology and everything else next year,” said Mark Hackett, chief market strategist at Nationwide, as the Federal Reserve’s latest meeting minutes underscored debate about economic risks ahead of the Fed’s next policy meeting on Jan. 27-28. Reuters
For Big Tech investors, the question is not whether AI matters, but whether spending translates into earnings and cash generation fast enough to justify today’s prices. Cash flow, a basic yardstick of money left after costs, is where scrutiny typically lands when enthusiasm cools.
In Nvidia’s case, sources said Chinese firms have ordered more than 2 million H200 chips for delivery in 2026, dwarfing the roughly 700,000 units Nvidia holds in inventory. The company has asked TSMC to begin producing additional chips in the second quarter of 2026, according to the sources.
Pricing and performance are part of the bet. The report said Nvidia has set pricing around $27,000 per H200 chip, and an eight-chip module is expected to cost about 1.5 million yuan, versus around 1.2 million yuan for the now-unavailable H20 module. Buyers view the H200 as attractive because it delivers roughly six times the performance of the H20, and it undercuts grey-market supply — unofficial channels outside authorized distribution — that can cost more.
Approvals remain the hinge. Beijing has yet to greenlight any H200 imports, and officials are still weighing whether access to advanced foreign chips would slow the development of domestic AI processors, Reuters reported. Nvidia has said licensed sales to authorized customers in China would not affect its ability to supply customers in the United States.
Supply risk is also shaped by export controls on the tools used to make chips. The U.S. government granted TSMC an annual license to import American chipmaking equipment to its Nanjing facility in China after prior exemptions expired on Dec. 31, a move the company said would keep operations and product deliveries uninterrupted. Reuters reported Samsung Electronics and SK Hynix received similar licenses. Reuters
China, meanwhile, is pushing the supply chain in the opposite direction. It is requiring chipmakers to use at least 50% domestically made equipment when they add new manufacturing capacity, three people familiar with the matter told Reuters, accelerating a shift toward local tool suppliers even where foreign equipment remains available. Reuters
Those chip and equipment headlines matter to Big Tech beyond semiconductors. Hyperscalers — the largest cloud operators that run massive data centers — need a steady flow of advanced processors to train and run AI systems, and any constraint can feed into pricing and delivery timelines across the sector.
The early signals point to strong demand but more dispersion in performance. If growth broadens across the market as strategists anticipate, Big Tech stocks may face tougher comparisons, with investors less willing to pay higher multiples without clear profit-through from AI.
For 2026, traders are watching three swing factors: AI demand, the interest-rate path, and the durability of U.S.-China technology rules. Any surprise on supply, demand or regulation can hit earnings expectations quickly in megacap stocks where investors still price in fast growth.
