What Nvidia’s Blowout Quarter Means for Asian and European Semiconductor Stocks

Nvidia’s latest results reinforced the strength of the AI infrastructure cycle, but the market response was selective rather than uniformly euphoric. Asian memory suppliers benefited most directly from Nvidia’s warning that component availability—especially memory—remains a constraint, while European semiconductor stocks moved in different directions. 8912

The message for investors is two-sided: AI infrastructure demand still looks substantial and multi-year, but the companies supplying that infrastructure will not share the benefits equally.

The headline numbers reset expectations

Nvidia reported fiscal second-quarter revenue of $96.2 billion, a 106% year-over-year increase. Its data-center business generated $89 billion, up 117% from the same period a year earlier and representing the overwhelming majority of sales. 91215

Management also indicated approximately 70% revenue growth for fiscal 2028, well above the roughly 44% to 45% growth that analysts had been expecting in the sources cited. 34513 That is an unusually long-range signal of confidence—but it came with an important qualification: Nvidia said growth remains constrained by the availability and cost of components. 678

Asian chip stocks: memory suppliers led the rally

Asian semiconductor shares generally responded positively, particularly companies exposed to high-bandwidth memory and other components used in AI systems. SK Hynix and Samsung Electronics rose after Nvidia highlighted the importance of securing additional memory supply. Kioxia also gained in the post-results session, while Taiwan Semiconductor Manufacturing and Tokyo Electron moved higher in the reported market reaction. 9

The gains were not uniform. Advantest, a major testing-equipment name, fell in the same session cited in market coverage, showing that investors were distinguishing between direct memory exposure and businesses whose orders depend more heavily on testing schedules, product qualifications and capital-spending timing. 9

That distinction matters. Nvidia’s results do not automatically translate into identical earnings growth for every company in the supply chain. The strongest immediate signal was for suppliers whose capacity is already a bottleneck.

Why memory makers have the clearest upside

Nvidia’s demand outlook improves visibility for HBM suppliers, including SK Hynix, Samsung and Micron. If Nvidia and its customers continue expanding AI-system deployments while memory remains scarce, suppliers may retain stronger pricing power and utilization. 101415

There is a trade-off for Nvidia itself. Management said memory costs were unusually high, putting pressure on gross margins and delaying the anticipated recovery. Sources cited a current gross margin of about 75%, with further pressure expected in coming periods as memory costs rise. 181114

In practical terms, part of the economic value created by AI demand is shifting toward memory manufacturers. Nvidia can sell more systems, but it must pay more for a critical input. That makes the memory shortage both a growth opportunity for suppliers and a profitability risk for the system designer.

Equipment, packaging and testing suppliers face a more uneven path

A sustained AI build-out should support capital spending across memory production, leading-edge manufacturing and advanced packaging. That is constructive for equipment companies serving deposition, etch, lithography, packaging and memory testing. Nvidia’s longer-range growth outlook strengthens the case for continued capacity expansion. 4612

Still, equipment and testing stocks can react differently from memory stocks. Their revenue depends on when customers approve projects, qualify new products and place orders. A strong Nvidia forecast therefore supports the industry’s direction without guaranteeing a smooth quarterly earnings path for every supplier.

Testing companies may be particularly sensitive to the timing of platform transitions and customer capital-expenditure decisions. The weaker performance of Advantest in the reported Asian session illustrates why investors treated the supply chain selectively rather than buying every semiconductor name. 9

TSMC remains a major indirect beneficiary

Nvidia’s results also support demand for the manufacturing and packaging infrastructure behind advanced AI processors. TSMC is therefore an important indirect beneficiary of the outlook: more AI platforms require more advanced compute silicon and sophisticated packaging capacity.

The available market coverage does not establish that every TSMC-related investment will rise in lockstep with Nvidia. TSMC and its suppliers remain exposed to customer spending decisions, capacity timing and geopolitical uncertainty. The more defensible conclusion is narrower: Nvidia’s results strengthen the demand case for the advanced manufacturing ecosystem, while leaving the timing and valuation of individual companies uncertain.

European chip stocks showed less uniform enthusiasm

European semiconductor shares were mixed around the earnings reaction. ASM International and BE Semiconductor gained in the reported session, while ASML declined modestly. 9 Earlier trading had also shown divergence among European names, with ASML and ASM International lower while Infineon and STMicroelectronics were higher. 17

This uneven performance suggests that investors were weighing more than Nvidia’s revenue growth. Expectations for AI-related equipment companies were already high, and Nvidia’s immediate bottleneck appeared concentrated in memory availability and cost rather than creating an indiscriminate boost for every equipment category.

For European chip stocks, the result was supportive evidence of a large AI market—but not a guarantee that valuations, order timing and near-term margins would all improve at once.

China limits the size of the opportunity

Nvidia’s growth forecast does not eliminate the impact of restrictions on advanced data-center compute sales to China. Its current outlook excludes data-center compute revenue from China, according to the earnings coverage. 8915

That exclusion narrows Nvidia’s addressable market and makes the global AI cycle less geographically uniform. It also increases the possibility of more segmented supply chains as Chinese customers seek domestic alternatives. These restrictions do not invalidate Nvidia’s global demand outlook, but they do add uncertainty to long-term market sizing and supply-chain planning.

What the results say about the AI investment cycle

The quarter is strong evidence that AI infrastructure spending is generating real revenue across a wider ecosystem—not just at Nvidia. The combination of $89 billion in data-center sales, 117% annual growth and a roughly 70% fiscal-2028 growth outlook points to continuing demand for memory, foundry services, packaging and semiconductor equipment. 31215

But strong supplier demand is not the same as proof that the cycle can expand indefinitely. Its durability ultimately depends on whether cloud providers and other AI customers can earn acceptable returns from the services built on this infrastructure. Nvidia’s results confirm current demand; they do not settle the longer-term question of how profitable that demand will be for every buyer and supplier.

The bottom line for investors

Nvidia’s earnings produced a bullish read-through for memory makers and a constructive—but more conditional—read-through for equipment, testing, packaging and foundry suppliers. Asian markets rewarded the most direct memory exposure, while European chip stocks remained differentiated. 9

The clearest interpretation is that the AI infrastructure cycle remains powerful and supply-limited. The key risks are also becoming clearer: memory costs can compress Nvidia’s margins, China restrictions reduce addressable demand, equipment orders may arrive unevenly, and higher interest rates can pressure richly valued technology shares even when operating fundamentals remain strong. Sticky U.S. inflation data had already increased concern about the Federal Reserve’s policy path before the earnings release.

Nvidia’s quarter therefore supports a durable AI build-out—but one that is likely to produce winners and laggards rather than a uniform semiconductor rally.