Amidst the turmoil of the stock market, the "strongest alpha" emerges! Tariffs cannot suppress the explosive expansion of AI computing power.

The recent performance call of the lithography giant ASML Holding NV ADR (ASML.US) showed that the management expects 2025 and 2026 to be growth years, with a focus on high-end process AI chips and data center storage chips due to dynamic demand in the end markets. This semiconductor equipment giant, known as the "pinnacle of human technology," emphasized that under the pressure of tariffs, the demand for AI computing power continues to be strong. As the focus of AI computing power shifts towards the endless demand in the field of AI reasoning, high-end lithography machine customers have confirmed this, revealing a continuous large-scale investment in the field of AI technology. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US), also known as the "king of chip manufacturing," showed in their recent performance that the demand for AI computing power is increasing rapidly, with net profit soaring by 60%. In the face of the global tariff pressure from Trump, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR reiterated strong performance growth data. They maintained their revenue growth expectations for 2025, with an expected growth rate of around 25% this year, doubling the revenue scale related to artificial intelligence (AI). Regarding the tariff-related issues that global investors are focusing on, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR stated that they have not observed any changes in customer behavior due to US tariffs, showing a stark contrast to the uncertainty in the global market. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR plans to double its CoWoS advanced packaging capacity, mainly for NVIDIA Corporation's AI GPU production, indicating their confidence that the strong demand for AI chips will continue until early 2026. During the performance call, the management of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR still expects a compound annual revenue growth rate of about 20% over the next 5 years (2024-2029), with AI-related revenue expected to grow by 45%. This is consistent with the strong expectations given in the previous performance meeting, implying that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR has not seen any decrease in demand due to Trump's aggressive global tariff policy. For the second quarter expectations, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR management expects revenue to range from $28.4 billion to $29.2 billion, meaning a potential increase of over 13% sequentially and over 36% year-over-year, far exceeding the market's expected $27.16 billion; with capital spending unchanged at $38-42 billion for 2025. In late March, the financial report from the largest computer storage chip manufacturer in the United States, Micron Technology, Inc. (MU.US), showed that the demand for storage chips closely related to AI training/inference systems remains extremely strong due to the AI infrastructure frenzy where large enterprises and government departments worldwide are investing heavily in AI. This has been driving significant revenue growth in Micron's data center business, including HBM storage systems and enterprise SSDs. The Micron management stated in the performance call that they are seeing incredibly strong demand for AI infrastructure components used to develop and efficiently operate artificial intelligence application software, including so-called "AI intelligent agents." Combining this with the latest performances and performance call summaries from Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR and ASML Holding NV ADR, it significantly reinforces the extremely optimistic demand prospects for the continued explosive growth of AI computing power. Currently, even Trump's administration's aggressive global tariff policy has not been able to suppress the growing demand for AI chips. With DeepSeek completely revolutionizing the efficiency in AI training and inference, driving future AI models towards a comprehensive focus on "low cost" and "high performance," the continued catalytic trend of large AI models integrating into various industries globally is expected to lead to an exponential growth in demand for cloud-based AI inference computing power. The acceleration of AI application software (especially generative AI software and AI agents) penetrating into various industries globally, thoroughly innovating efficiency in various business scenarios and significantly increasing sales, is expected to drive a potential exponential growth in demand for AI infrastructure such as AI chips based on AI GPU and AI ASIC, rather than the previously expected "DeepSeek shockwave" causing a cliff-like decline in demand for AI computing power. As NVIDIA Corporation CEO, Jensen Huang, said in the NVIDIA Corporation performance call in February, the demand for AI chips continues to grow strongly. "DeepSeek-R1 has ignited the global enthusiasm, and the company is confident in the continuous growth of AI inference."The potential demand brought by reasoning is exciting. This is a great innovation, but more importantly, it opens up a world-class reasoning AI model. Models such as OpenAI, Grok-3, DeepSeek-R1 are reasoning models that apply reasoning time scaling. Reasoning models can consume over 100 times the computing power.Based on the latest forecast of the World Semiconductor Trade Statistics (WSTS), it is expected that the global semiconductor market size will continue to grow in 2025 compared to 2024. This means that the global semiconductor market is expected to grow by approximately 11.2% on top of the already strong recovery trend in 2024, with the global market size expected to reach around $697 billion. WSTS predicts that the growth of the semiconductor market in 2025 will be mainly driven by the strong demand for AI training/inference computing in the enterprise storage chip category, as well as the strong push from the artificial intelligence logic chip category. It is expected that in 2025, the overall market size of logic chips including CPUs, GPUs, and ASICs will increase by about 17% year-on-year. The market size of storage chips covering areas such as HBM and enterprise-level SSDs is expected to increase by over 13% from the significant growth of 81% in 2023. At the same time, WSTS also predicts that the growth rates of all other subcategories of chips such as discrete devices, optoelectronics, sensors, MCUs, and analog chips will reach single-digit percentages. Amidst the turbulent fluctuations in the global stock markets, the "alpha" properties of the AI computing sector are highlighted The latest research report released by the Wall Street financial giant Morgan Stanley shows that AI/ML (artificial intelligence/machine learning) are the top priority in the IT budgets of technology companies in the United States, with strong demand for security defense software following closely behind the AI wave. This lengthy research and survey results released by Morgan Stanley show a clear divergence in the expectations of IT budgets among US CIOs, mainly influenced by macroeconomic fluctuations. Despite CIOs lowering their expectations for short-term growth in IT budgets, their confidence in long-term growth drivers (such as artificial intelligence/machine learning) and mid-term IT spending remains stable, with expectations of significant expansion in AI spending. As investors further digest and price in Trump's radical tariff policies directed towards the global market, the panic in the global stock markets has eased, especially with a brief rebound in the stock prices of technology companies that suffered the most severe selling during this wave of global stock market selloff. Technology stocks have been the core driver of the long-term bull market in global stocks in recent years, so investors are now beginning to look towards technology stocks to lead a strong rebound in the global stock market after enduring a new round of selling. For the "AI computing industry chain" that has maintained its top position in global stock market investment since 2023, Morgan Stanley's research report shows that the bullish investment logic for artificial intelligence is following a trend of gradually recovering amid expectations of strong demand for AI infrastructure such as AI chips. Compared to non-AI sectors in the semiconductor field, demand expectations for AI GPUs, AI ASICs, HBM, Ethernet switches, and core power equipment, which are the leaders in AI computing, are much stronger. They are expected to show the strongest leadership positions in the market during short-term rebound trends such as "tactical rebounds." Morgan Stanley's latest research data shows that technology stocks most closely associated with AI/ML, especially long-term leaders in the AI computing industry chain such as NVIDIA Corporation, Broadcom Inc., Micron, and Taiwan Semiconductor Manufacturing Co., Ltd., Sponsored ADR, are expected to demonstrate significantly higher "alpha excess returns" compared to the S&P 500 index and the Nasdaq 100 index, which is known as the "technology stock benchmark." The "alpha" is defined as actual investment returns far exceeding "beta returns" - that is, investment returns far exceeding the synchronous investment return data tracked by benchmark stock indices. Synchronous returns achieved by tracking benchmark indices are also known as "beta returns." Statistics show that in April, there was severe volatility in the US stock market, but the alpha properties of the AI chip giants have already been fully demonstrated, as the AI computing industry chain begins to show a leading trend. For example, Broadcom Inc., one of the leaders in AI chip development, saw an increase of over 2% in April, while the S&P 500 index saw a decline of 6%. NVIDIA Corporation's GB200 high-speed copper cable supplier, Amphenol (APH.US), also significantly outperformed the S&P 500 index. In Asia, leaders in the AI computing industry chain such as SK Hynix, Tokyo Electronics, and Semiconductor Manufacturing International Corporation have seen significant increases in stock prices outperforming the overall market. In Europe, companies like ASM International and BE Semiconductor from the Netherlands have also seen significant outperformance in stock prices compared to the European market. Research platform Seeking AlphaAccording to the latest list of the top ten semiconductor stocks in the United States compiled based on quantitative indicators, AI chip giants are expected to gain more favor from institutions and retail investors under the "tariff storm" of the Trump administration. Data compiled by Seeking Alpha shows that these stocks have a market capitalization of at least $10 billion and are ranked based on their proprietary quantitative system. With investors' increasing attention to the semiconductor industry in recent times, this list provides a quantitative data-driven perspective to help investors understand which companies may be in the best position amidst the increasingly challenging macroeconomic and political challenges from GEO Group Inc.As a reference, the Seeking Alpha quant system is driven by SA's unique "Quant System," which rates stocks based on overall value, growth potential, profitability, earnings per share correction trend, and price momentum indicators. The rankings show that the top two are leaders in AI chips, with AI ASIC chip leader Broadcom Inc. (AVGO.US) ranking first, and AI GPU dominator NVIDIA Corporation (NVDA.US) ranking second. The following image shows the top ten US semiconductor stocks in the list. Led by Morgan Stanley, Wall Street banks continue to focus on AI investment logic repair On the eve of earnings season, Oppenheimer, a well-known Wall Street investment firm, reiterated its placement of the "AI chip giants," namely NVIDIA Corporation (NVDA.US), Broadcom Inc. (AVGO.US), and Marvell Technology, Inc. (MRVL.US), as its top recommendations in the semiconductor sector. The Oppenheimer analyst team wrote in a report to clients, "Amid the turbulent macro environment and tariff backdrop, we believe that artificial intelligence chips are the strongest and safest growth direction." A recent research report from KeyBanc Capital Markets shows that the global semiconductor industry presents a "two-tiered" pattern - with strong demand for AI chips but other types of chip demand still struggling. KeyBanc analysts stated that the strongest theme of AI chip demand is still dominated by the "AI chip dominator" NVIDIA Corporation, which holds 80%-90% market share in the AI chip market, while other AI chip participants generally have not escaped negative catalysts. Analysts particularly noted that the Blackwell architecture AI GPU production is progressing smoothly, and the demand for advanced packaging techniques like CoWoS remains stable. "AI chip demand continues to grow explosively, and we see multiple cross-cutting impacts in the AI-specific chip field of NVIDIA Corporation's AI GPU and ASIC." said KeyBanc. UBS Group AG released a research report stating that although it is difficult to determine whether semiconductor giants can fully avoid the semiconductor demand disruption related to Trump's aggressive tariff policies, UBS Group AG firmly believes that artificial intelligence (AI) spending will remain resilient. The weakness in the overall demand environment may force companies to accelerate the adoption of generative AI technology to reduce operating costs, so UBS Group AG will focus more on AI computation-driven stock targets such as NVIDIA Corporation and Broadcom Inc. A research report from Morgan Stanley shows that Dell Technologies, Inc. Class C (DELL.US) has performed exceptionally well among enterprise hardware suppliers, with a net spending intention reaching +35%, up 1 percentage point from 3Q24, hitting a new high in Morgan Stanley's survey reports for more than 8 years, reflecting the very strong demand for core hardware infrastructure in the AI field among major US technology companies. Morgan Stanley's survey data shows that 55% of CIOs evaluating or planning to evaluate AI technology exhibit a tendency to configure DELL's AI infrastructure solutions, slightly up from 54% in 3Q24, indicating that the demand for high-performance AI servers equipped with AI GPU and AI ASIC remains very strong. In terms of corporate AI computation spending, US technology giants have also begun to join the ranks of Wall Street - namely those who are extremely bullish on the expansion of AI computation resource demand, such as Alphabet Inc. Class C parent company Alphabet (GOOGL.US) CEO Sundar Pichai reiterated the technology giant's commitment to invest approximately $75 billion in building a large-scale AI infrastructure for AI data centers. Amazon.com, Inc. (AMZN.US) founder and CEO Andy Jassy has made a rare high-profile defense of the company's massive investment in the field of artificial intelligence in his annual letter to shareholders last week. The head of the US e-commerce giant bluntly said, "When every customer experience will be reshaped by AI, deep involvement in artificial intelligence is not a choice, but a survival necessity." Amazon.com, Inc. management still expects capital expenditures to reach $100 billion this year, with most of it going towards AI-related infrastructure projects. Deutsche Bank Aktiengesellschaft, UBS Group AG, and Piper Sandler, although slightly lowering Nvidia Corporation's target stock price in the latest research report, still give a target stock price of at least $135 in the next 12 months, and an optimistic rating equivalent to a "buy." The latest ratings and target prices compiled by TIPRANKS show that Wall Street analysts have a consensus rating of "strong buy" for NVIDIA Corporation's stock, with no "sell" ratings; the average target price for the next 12 months is as high as $170, indicating a potential upside of 68%; the highest target price is $200, and the most pessimistic target price is $120 - still significantly higher than the current stock price.