Nvidia Says Custom AI Chips Need Its Ecosystem — 4 Stocks Could Win Big

Welcome back to another episode of What the Chip Happened? What I believe is the greatest semiconductor and AI podcast out right now. Now, in today's episode, I want to take a closer look at Nvidia because Nvidia pretty much said it's game over for its competitors. Also, I want to take a closer look at four stocks that I believe can benefit dramatically from this and one stock that I believe needs to make some changes and if they don't, then things might be a little bearish for this AI giant. So, let's take a closer look in today's episode. But before we begin, if you're serious about semiconductor and AI investing, I break down major earnings and conferences inside my community, institutional quality research built for retail investors, get 33% off at whatthechipappen.com. All right, guys. Like I mentioned in the intro, today I want to look at Nvidia and this is Nvidia's earnings week. So, we're going to get a lot of content and a lot of things coming out from Nvidia. Today we got a few press release and I it's so much that I might have to do another video on some of the other things because we had some pretty cool news for SpaceX, for Nebas and for Core Weef, but we're not going to discuss that in today's episode. I think that might be tomorrow. Regardless, with Nvidia earnings coming up, I'm actually pretty happy that the stock is not as excited, right? We were over $220 about a week ago. Now we're at 208. I'm a long-term investor of Nvidia, right? This is the company that has completely changed my life. Now, I don't know when Nvidia is going to have that quarter that's going to completely flip the switch and make it exciting again for the AI space. And the reason I mean that is because year to date, the stock is pretty much flat, right? Up 10%. That's nothing, especially if you are the AI leader. I don't know if it's this quarter or next quarter or the quarter after that, but one of these quarters, the market is going to wake up and say, I was wrong with Nvidia. And this even though it is the biggest company at $5 trillion, it can actually be bigger. Now, in the intro of this episode, I mentioned that there's a market Nvidia is pretty much saying competition is dead and competition is so dead that you need to come back to Nvidia. And that competition is the XPU market. Now, for those that are not familiar with the XPU market, this is the custom AI chip market that a lot of hyperscalers are doing, right? hyperscalers like Microsoft, like Google, like Amazon are designing their own AI chips and meta's doing it too. And we also have kind of AI labs like OpenAI has Jalapeno and and and Enthropic also has their own AI chips. But Nvidia says that chip design is hard and if you're building an XPU, you are wasting your time and this is a market that's dead unless unless you enter the Nvidia ecosystem. Now, the reason that they mentioned this is because back then, right back then in the chip design process or in the kind of just the compute market, all you really had to do was sell a chip. And if you sold the chip, you got revenue, you got collected, and that chip worked well. Now, in this AI market, that's completely changing because you're building factories, right? You're building full factories. And when you're building full factories, you need to be able to design, you're no longer designing a chip, you're designing a system. And most companies are still just designing a chip. And that's not even half the battle, right? Probably not even a third of the battle because if you're building, we're building these gigawatt data centers now, right? And historically, a gigawatt data center we can see is collecting roughly $50 billion of revenue per year, give or take, plus uh plus or minus 10 billion. Regardless, these massive data centers are crucial and the number of revenues that they're collecting is extremely high. So if you are building an AI chip, you need to make sure that you're able to build an AI data center. And that's no longer just a chip itself. You need to include the scale up, the scale out, all the networking types of solutions. You need to be able to understand how you can rack uh your rack scale architecture, production factory of software. you need to have kind of this crazy supply ecosystem that allows you to not just say, "Hey, I'm just building a chip, but I'm building this whole AI data center because money is time or time is money, right?" Nvidia, you can call them up and say, "Listen, I need a 1K data center." And Nvidia says, "No problem. I know how to handle the cooling. This is the blueprint that I have to do all this. You'll be able to set up your data center in no time. You know, these chips are great, and you're going to be collecting revenue in no time. If you're doing an ASIC with somebody internally, have they thought about all that already? Right? And if they haven't, what is going to be the timeline of finally getting all that ready? And then what if it doesn't work? You missed out on tens of billions of dollars on revenue on a 1 gigawatt data center because you were trying to save a few margins on an AS6 solution. Uh so Nvidia is saying if you're in this A6 space, it's hard work. But if you really want to be in this AS6 space, come with me, right? I'll help you out. I have this thing called NDLink Fusion which allows you to bring your ASIC into the Nvidia ecosystem. So, while maybe you're no longer a 100% of my customer, you're still 60 70% of my customer and we both win because you feel like, hey, you don't are not buying all my chips, then I win because I'm still growing and growing with you as well. Now, Envy Link Fusion allows, like I mentioned, the connection of these XPUs to Nvidia's infrastructure. And Nvidia actually gives a lot of reasons why this is pretty important. And and when you kind of connect within Nvidia's ecosystem, you're connecting with their scale up, their scale out, their CPUs, and the list goes on. But but the main reason Nvidia does this is because or or they're offering this and they're bringing it up is they saying that this is a great way to manage risk, right? A data center locked to one chip can become a schedule risk. And like I was talking about, imagine you're building a data center that only is meant for one type of ASIC chip that you are designing. And what happens if there's a hiccup? That data center is not making any revenue. But what if you are part of the Nvidia MVLink fusion program? A customer can deploy their rack level solution with Nvidia GPUs to start off with. Right, we're going to build, we're building this data center. My AI chip is not ready yet. Let me build with Nvidia's GPU and the whole ecosystem and then they can decouple the development of their XPUs and put it at a different pace. So maybe month one, month two, month three as you're building this data center and you're putting things on, you're going to start with NV link and Nvidia's main solution. But now 5 months have happened and you've actually feel more comfortable with your AI chip and you are able to put it into this Nvidia ecosystem where now these two servers can live together. So it's the best of both worlds because you're able to start collecting revenue as soon as possible because Nvidia is the goat at deciding chips. But at the same time you're also going to be able to make your shareholders happy. you may be able to increase your margins because as times progress you're going to be able to start adding your own AS6 into these solutions as well but still be part of the whole ecosystem and I think that is extremely extremely extremely bullish. Now there are a few partners that I think can benefit from this. Nvidia has actually given us the entity link fusion list of the stocks of the companies that are working in the CPU side. You have ARM, you have Intel, you have Fujitsu, you have Sci-Fi. Now, one thing that I found pretty interesting was Qualcomm used to be a part of this list. I don't know where they went. I don't know if that's bullish or bearish, but they used to be part of this list. Now, in the custom silicon, you have a sterile labs, you have chips, you have Samsung, you have MediaTek, and you have Marval. In the technology partners, you have Cadence and Synopsis. These are the ones that help you design these. In the optical partners, you have Air Labs, Light Matter, and Marval. So you can kind of already guess what are the markets that I believe can benefit from these and it's going to be the parts within these ecosystems. And the one one of the players I believe is very high likely of winning is going to be Marll. It's not a guarantee but very high likely. The reason I bring that is because in March 31st of 2026, Nvidia brought Marll they joined forces and and they kind of expanded partnership and one of the partnerships was the optic side. The other things was the Envy Link Fusion. Nvidia ended up investing $2 billion in Marvel. Around the same time frame, we did hear that AWS, who is building their own chips, the Tranium 4, is actually going to be using Nvidia's NDLink Fusion. And the one that designs and helps AWS with the Trinium 4 is, you guessed it, Marvel Val, right? Marll is the one winning here. And and now Nvidia, I I believe this is really good for AWS understood. AWS understood that if we're gonna have to be if we're going to be able to be the a good performant in our AI chip good total cost of ownership we have to join with Nvidia. So it's interesting the market is fearful that Nvidia is going to lose customers because of ASIC wins but then you have already announcements like this where Nvidia is actually still keeping that customer that designing their own AI chip and they're going to be able to license a lot of products. The other one that I thought was pretty interesting is Marll and Google announced a partnership. Now Marll Marll is not going to help Google design their own TPUs, but they're going to help specific AI accelerators. Is this kind of the entrylevel point for Marll to somehow sleep slip NVLink into Google? Because at the moment there is a company that's very popular in the AS6 space that does not is not part of the NVLink fusion space and that's Brockman. That's the company that I'm a little bit I wouldn't say worried about, but I think they need to change certain things and we'll talk a little bit about there. Microsoft is also working with them for the Maya 300. Right. So, Marll does have a lot of and and I wonder if we're going to get an announcement where one of the upcoming Mayas from Microsoft's AS6 might end up being part of the NVLink fusion world. So, few stocks that I believe can benefit. First, Marll, right? I think NDLink fusion is going to be big uh especially as we're getting into these sizes and this would be a good kind of revenue driver for Marll. We go any further. If you guys are enjoying my AI and semiconductor thoughts, make sure to check out my exclusive community at what the chipappen.com. I am there on a daily basis. We have exclusive and live streams in the platforms. We have deep dives on earnings. We have deep dives on conferences and so much more. So, make sure to check out what thechipappen.com to get an edge before the next earnings or conference move. Also, more importantly, if it's not a partnership for you and you don't like the community, there is a 30-day refund period. So, you just message me and say, "Jose, this sucks and I want my money back and I'll gladly do it." So, check it out at what the chiphappen.com. Not only because it's going to be a partner for the entity link, but most likely if you're trying to work on certain networking solutions or certain optics solution, Marll is going to be that partner because they're working with like, hey, you're already doing the MVL fusion with us. Let us also work with you on some of the networking and optics solution as well. So, Marll is the first one. The next one is the Sterilabs. This is another partner from their kind of list of of custom silicon. You have a sterile here and I do believe they can benefit dramatically again with all these types of approaches and the sterilapse right now down roughly 42 from its 52- week high or a year-to-ate high. A sterile is another one that I believe can benefit in the long term of things. Next, the two are the kind of hyperscalers that are already working with Marll. Amazon is the first and Microsoft is the second. Now, I'm a little hesitant on buying these because we did buy them a lot cheaper when we were kind of in the 220s below. We bought Amazon in the sub400s. We were buying Microsoft. So, bullish long-term, maybe not right now for individual stocks unless I'm dollar cost averaging. Marlla Labs, I don't mind being a little bit more aggressive on these high beta names because they have pulled down a nice amount from their 52- week high. And I am very bullish. Again, this doesn't mean they're going to be winners. the market can always shift, but based on the data points that I have right now, I would be excited on these two stocks at the moment. Now, like I mentioned, there is one stock that I think needs to change how they're working with and Broadcom does not is not part of the NVLink fusion, right? They're not part of the NVLink fusion, but they have a huge customer base, right? They have Anthropic, they have OpenAI, they have Meta, they have Google, and they have other customers. What if those other customers start to leave Broadcom or start to work with other players because they're so hard-headed and don't want to be part of the Envy Link Fusion world? I, for example, if I was OpenAI, I was if I was Nvidia, I would go to OpenAI, I'd be like, "Are you sure Jalapeno is going to do good? Are you sure you guys have the supply chain unlocked? Are you sure about this, that, and this, and that? Wouldn't it make sense for you to go talk to Broadcom to make sure you are still part of the ecosystem?" Because you're going to make sure that everything's right. Right. we have all this worked out. So if I'm a company like OpenAI and Entropic, right, these are two players that unfortunately don't have the cash flow like the hyperscalers. So if a chip fails and it fails really bad, especially if they're building something at massive scale, that is going to be a huge hit for them. For Google, if one of their AI chips fails, nothing bad happens, right? I mean, I think they they'll take a hit and maybe the stock might be punished, but it's not end game over. If OpenAI and Enthropic spent 500 megawatts on a chip that didn't scale up properly, that is bad news. And I'm pretty sure Nvidia is letting it be known to those players. And I wonder if Bracom is going to eventually be a part of the NVLink Fusion domain or partnership. If actually does, I would actually be more bullish on Braom than I am right now. Now, I'm not bearish Bracom and I don't think it's game over completely for them, but it is something that investors should keep a closer eye on and I would rather right now focus on companies that are part of the NDLink Fusion partnership list. So, I hope you guys enjoyed today's episode. Take care. Have a good day and see you all next