By David Moadel
Publication Date: 2026-05-20 19:26:00
Quick Read
NVIDIA (NVDA) generated $215.94B in fiscal 2026 revenue with Q4 data center revenue of $62.31B and 75% non-GAAP gross margin, while Taiwan Semiconductor Manufacturing (TSM) commands a 72% foundry market share in advanced nodes.
Taiwan Semiconductor’s measured capacity expansion is preventing an AI infrastructure bubble while simultaneously capping NVIDIA’s near-term revenue ceiling, creating a critical balancing act where too much supply growth could convert the secular AI trend into a boom-and-bust cycle.
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Hedge fund manager Gavin Baker, founder and CIO of Atreides Management, offered a counterintuitive framing of the AI trade on a recent appearance on Patrick O’Shaughnessy’s Invest Like the Best program. Baker’s central paradox is that the very supply constraint holding NVIDIA (NASDAQ:NVDA) back is keeping AI infrastructure spending from tipping into a classic capex bubble.
At the center of the bottleneck issue is Taiwan Semiconductor Manufacturing (NYSE:TSM) (also known as TSMC), which fabricates essentially every leading-edge GPU that NVIDIA designs. Baker’s argument is that TSMC’s measured capacity expansion is helping the AI buildout, even as it caps NVIDIA’s near-term revenue ceiling.
For investors sizing the gap between the current demand and the supply, Baker offered a striking idea. “If Taiwan Semi did what Jensen wanted, Nvidia could…
