Nvidia, Broadcom shielded as AI power crunch hits chip supply chain, says Morgan Stanley

Nvidia and Broadcom appear relatively shielded from the intensifying US data-center power shortage, according to Morgan Stanley. However, any potential delays in AI implementations could impact companies producing secondary chip components such as memory, optical and power-management parts, the brokerage warned on Monday.

Morgan Stanley projected last month that US data-center operators will face a 34 percent net power shortfall through 2028, equivalent to 32 gigawatts, after considering elements like on-site renewable generation and fuel cells. The AI surge has spurred billions of dollars in data-center investments, yet the immense computational and electrical demands of generative AI are increasingly clashing with US power infrastructure constraints.

Both Morgan Stanley and Goldman Sachs have highlighted growing limitations on the US data-center expansion; Goldman Sachs anticipates minimal near-term repercussions from political opposition, while Morgan Stanley anticipates labor, power and political hurdles. The brokerage asserts that these bottlenecks do not jeopardize Nvidia or Broadcom's 2027 projections, citing their proficiency in chip placement, geographic expansion, and collaboration between data centers, semiconductor suppliers, and the power supply chain.

Should chip capacity remain undeployed, clients might postpone deliveries or cancel orders, with memory, optical, power-management, and analog components being the most vulnerable to inventory disruptions, Morgan Stanley stated.