WS #16997
Chinese AI chipmakers like Moore Threads and MetaX are reporting their first profits, indicating a maturing domestic supply chain that could eventually erode Nvidia's monopoly. However, US leaders like Nvidia and AMD remain burdened by high required growth rates—Nvidia still needs ~20% annual growth to justify its current valuation even after a 21% drop. This divergence suggests that while the AI hardware market is expanding, the valuation premium for US incumbents is under severe stress, with investors demanding proof of sustained margin expansion rather than just revenue growth.
AI Valuation & Chinese Competition
Chinese AI chipmakers like Moore Threads and MetaX are reporting their first profits, indicating a maturing domestic supply chain that could eventually erode Nvidia's monopoly. However, US leaders like Nvidia and AMD remain burdened by high required growth rates—Nvidia still needs ~20% annual growth to justify its current valuation even after a 21% drop. This divergence suggests that while the AI hardware market is expanding, the valuation premium for US incumbents is under severe stress, with investors demanding proof of sustained margin expansion rather than just revenue growth.