New York, December 31, 2025, 17:33 ET — After Hours
- Nvidia has sought talks with TSMC about expanding H200 GPU production as demand in China soars, people familiar with the matter told Reuters. Reuters
- Trading in mega-cap AI stocks was weak in late trading, with NVIDIA, Microsoft, and Meta falling slightly in extended trading.
- Looking ahead to 2026, investors are focused on AI capital spending, U.S.-China technology regulation, and the pace of chip supply. Reuters
NVIDIA has approached Taiwan Semiconductor Manufacturing Co. about increasing production of its H200 graphics processing units (GPUs), chips used to train AI systems, after the Chinese tech company ordered more than 2 million units for 2026, far exceeding Nvidia's inventory of about 700,000 units, people told Reuters. The Chinese government has not yet cleared the import process, and the Trump administration only recently allowed H200 exports to China, subject to a 25% handling fee, the people said. Reuters
The latest supply and policy test comes as investors try to determine how much of the AI trade could account for by 2026 after a year dominated by spending on chips and data centers. Sam Stovall, chief investment strategist at CFRA, said the market needs to be “firing on all cylinders” to achieve another year of strong double-digit returns. Reuters
U.S. stocks ended the year lower on Wednesday, with the S&P 500 down 0.74% and the Nasdaq Composite down 0.76% amid light holiday trading, according to Reuters. The market is closed on Thursday for New Year's Day. Reuters
In after-hours trading, Nvidia fell about 0.5% to $186.50, Microsoft fell 0.8% and Meta fell 0.9%. Chip-related peers also fell, with AMD down 0.5%, Broadcom down 1.1%, Micron down 2.5% and Marvell down 2.1%. Amazon and Alphabet fell slightly. TSMC rose about 1.4%.
According to sources cited by Investing.com, NVIDIA has asked TSMC to begin production of additional H200 chips, with work expected to begin in the second quarter of 2026, and the chips expected to cost around $27,000, with the final price depending on volume and customer terms. The report also states that NVIDIA plans to make its first shipment to China before the Lunar New Year holiday in mid-February. invest
The China angle is important because the Chinese government is pushing its chip industry to reduce its dependence on foreign technology. According to Reuters, Chinese authorities have told some domestic semiconductor makers to use locally produced equipment for at least 50% of their purchases in 2026, a move that could reshape supply chains and pricing for global vendors. Reuters
Data center expansion continues to be a near-term demand signal for the sector. Elon Musk said xAI has purchased a third building to expand its infrastructure, increasing its training capacity to nearly 2 gigawatts, and aims to expand its Memphis “Colossus” cluster to at least 1 million GPUs in the long term, Reuters reported. Reuters
Trading activity is also influencing Wall Street's AI narrative. Meta announced that it has acquired Chinese-founded AI startup Manus and will integrate its services into its products, including Meta AI. The deal values the Singapore-based company at between $2 billion and $3 billion, sources said. Reuters
In the cloud and infrastructure space, Reuters reports that Brookfield is launching a cloud business called Radiant to allow companies to lease AI chips housed in its data centers, adding another entrant to a market dominated by large hyperscalers. Reuters
Nvidia is also considering software and model assets. According to Reuters, the company is in talks to acquire Israeli AI startup AI21 Labs for up to $3 billion, in a move to expand beyond silicon. Reuters
US and Chinese technology regulations continued to be a factor for semiconductor stocks in the second half of the year. According to Reuters, the U.S. government granted TSMC an annual export permit allowing it to import U.S. semiconductor manufacturing equipment for its China operations, as the prior permit was set to expire at the end of the year. Reuters
China's domestic buildup is also moving beyond processors to key AI components. Chinese memory chip maker ChangXin Memory Technologies has hired an advisor for its Shanghai IPO to invest in high-bandwidth memory (HBM), or stacked memory used with AI accelerators, Reuters reported. Reuters
With U.S. markets closed on Thursday, traders are keeping an eye on two pressure points heading into Friday. It will depend on whether Chinese approvals and U.S. export controls continue to change, and whether AI “capex” (capital spending on chips, servers, and power supplies) can be sustained as companies set their 2026 budgets. Any sign of order delays or supply bottlenecks can quickly ripple through the entire AI supply chain, from chip makers to cloud and data center builders.
