Gene Munster Warns Wall Street Is Underestimating 2026 AI Demand As Nvidia And TSMC Signal Strong Upside

On Thursday, Deepwater Asset Management's managing partner Gene Munster said new signals from Nvidia Corp (NASDAQ:NVDA) and its key chip supplier suggest artificial intelligence growth is accelerating into 2026, not slowing.

AI Infrastructure Growth Seen Beating Expectations

Munster took X and said that key indicators point to stronger-than-expected AI fundamentals this year, prompting him to forecast Nvidia revenue growth of more than 65% year over year in 2026, well above Wall Street's roughly 50% consensus.

"Bottom line: AI infrastructure growth in 2026 is likely to exceed expectations," Munster wrote on X, calling current signals "2-for-2" in favor of continued momentum.

Nvidia Commentary Hints At Upside

Munster pointed to Nvidia's management commentary at CES, saying executives appeared confident that demand for AI infrastructure could outpace current analyst models.

He noted that the tone from Nvidia leadership suggested upside to consensus growth forecasts, reinforcing the view that enterprise and data center AI spending remains robust.

TSMC Results Strengthen Nvidia Read-Through

Munster also cited Taiwan Semiconductor Manufacturing Co.'s  (NYSE:TSM) latest guidance as a key confirmation signal. TSMC projected first-quarter 2026 revenue in the range of $34.6 billion to $35.8 billion, comfortably above Wall Street expectations of about $33.2 billion.

TSMC shares gained 4.44% during Thursday's regular session and an additional 0.47% in after-hours trading, according to Benzinga Pro. Meanwhile, Nvidia was up 2.10% during the regular session and increased by 0.39% in after-hours.

"Nvidia is up on the read-through," Munster said, adding that the results imply TSMC revenue could grow about 40% year over year in the March 2026 quarter.

TSMC Q4 Earnings Beat Expectations 

TSMC delivered a decisive fourth-quarter beat, exceeding expectations on margins, earnings and outlook. Gross margin climbed to 62.3%, topping the 60.6% consensus estimate, while earnings per share rose to $3.09, well ahead of forecasts of $2.90.

Revenue reached a record $33.1 billion, slightly above Wall Street's $33 billion projection.

Concerns about an AI bubble have eased following TSMC's strong quarterly report and impressive margins. CEO CC Wei said that "AI is real," supported by the fact that the company's High-Performance Computing segment now represents 55% of total revenue.

According to Benzinga's Edge Stock Rankings, TSMC demonstrates a strong price trend in the short, medium and long term, despite holding a weak Value rating.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.