Nvidia's Big U.S. Investment Has Us Watching These Stocks, Reshoring Capacity
Also CoreWeave hits the IPO trail and a big M&A deal supports our recent upgrade for this holding
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Nvidia NVDA CEO Jensen Huang yesterday revealed plans to invest hundreds of billions of dollars over the next four years in U.S. semiconductor manufacturing. As Huang explained, this is part of Nvidia’s efforts to diversify its supply chain from Asia to the U.S., a move that is likely also being influenced by U.S. trade policies. It was later clarified the company expects to spend approximately half a trillion dollars on electronics, with a significant portion intended for domestic production.
While President Trump has been critical of the CHIPS Act, claiming that tariffs on semiconductors would be enough to encourage companies to move production to the U.S., we are also seeing members of Congress defend the CHIPS Act. No surprise, given they are politicians and are probably looking to preserve the funds awarded to 19 companies that are expected to create some 145,000 jobs.
The key for us will be the re-shoring of chip capacity to the U.S. and the impact it has on our holdings like Applied Materials AMAT as well as our construction-related positions in the Pro Portfolio. Earlier this month, Taiwan Semiconductor TSM announced a $100 billion investment in chip manufacturing facilities in Arizona, on top of the $65 billion investment agreed under the Biden administration. That and other investments are expected to more than triple U.S. chip manufacturing capacity over the next several years. We’ll be looking for additional announcements from others, such as Nvidia and Apple AAPL partner Foxconn, but also more details on Trump’s Stargate Projects.
CoreWeave's on the Road, QXO to Buy Beacon Roofing Supply
Earlier this week we explained why we would be watching the eventual roadshow and initial public offering pricing for CoreWeave. More details on that transaction are making their way out, and the offering is targeting 49 million shares between $47-$55. CoreWeave is slated to begin its offering roadshow “later this week” and that suggests we could see the transaction price either late March or early April.
Our interest in the deal stems from our position in One-rated Morgan Stanley MS, which is one of the joint lead bookrunners for the offering. We’d point out as well that Morgan Stanely served as lead financial adviser for QXO’s (QXO) $11 billion takeover of Beacon Roofing Supply BECN announced this morning. Morgan will likely collect those fees in Q2 2025.
Earlier this week we commented that Alphabet’s GOOGL acquisition of cybersecurity company Wiz would likely result in follow-up M&A activity by others. Subsequent reports reveal the deal was fast-tracked by the Trump administration, and that could be another indication investment banking activity is poised to rebound.
The Pro Portfolio is long GOOGL, NVDA, AMAT, AAPL.
