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

Nvidia and Broadcom are seen as relatively unscathed by the intensifying US data-center power shortage, according to Morgan Stanley. However, the repercussions of this crisis could ripple through the production of secondary chip components, including memory, optical and power-management elements. The brokerage agency projected last month that US data-center developers are facing a 34 percent net power shortfall through 2028, accounting for a total of 32 gigawatts.

While the surge in AI applications has sparked billions in data-center investments, the astronomical computational and electrical demands of generative AI are increasingly clashing with US power supply constraints. Morgan Stanley and Goldman Sachs have both highlighted the mounting challenges to the US data-center expansion; Goldman Sachs anticipates a limited impact in the short term, whereas Morgan Stanley factors in labor, power, and political hurdles.

The investment bank maintains that these impediments should not jeopardize Nvidia or Broadcom's 2027 projections, citing their ability to anticipate chip placements, geographic growth, and synchronization among data centers, semiconductor vendors, and the power supply network. Morgan Stanley predicts that if chip production fails to keep pace, customers might delay shipments or abandon orders, with memory, optics, power management, and analog components being the most vulnerable to inventory disruptions.