NVIDIA Concept Stocks Investment Opportunities in the AI Chip Wave: Which Targets Are Worth Watching in 2024?

Why Are NVIDIA Concept Stocks Becoming Market Focus?

Entering the second half of 2024, NVIDIA’s stock performance has been remarkable. In mid-June, the company’s market capitalization reached a high of $3.34 trillion, even surpassing Apple and Microsoft to become the world’s largest company by market value. However, the good times didn’t last long; the stock then experienced a decline of over 20%, marking the worst monthly drop in nearly two years, with a market cap evaporating nearly $800 billion. Fortunately, after hitting bottom in August, NVIDIA’s stock rebounded, rising 25% by mid-October, with the price approaching previous highs again.

This rebound in NVIDIA’s stock price has driven the performance of the entire supply chain industry. Leading Taiwanese companies have delivered impressive results—TSMC’s September revenue hit a record high of NT$251.8 billion, up nearly 40% year-over-year; and Advanced Semiconductor Engineering (ASE) surpassed NT$55.5 billion in September revenue, reaching a nearly one-year high. The stock prices of these companies have also risen accordingly, reflecting market optimism about the AI chips industry chain.

Understanding the Nature of NVIDIA Concept Stocks

To understand why these companies are classified as NVIDIA concept stocks, it is essential to first grasp NVIDIA’s business model. As a fabless design company, NVIDIA focuses on innovative GPU chip design, while manufacturing is entirely outsourced. This presents an opportunity for Taiwanese tech companies—many local firms have specialized in chip foundry, packaging, testing, and assembly for decades, gradually becoming key players in NVIDIA’s supply ecosystem.

The strategic value of investing in NVIDIA concept stocks lies in two aspects: firstly, NVIDIA holds an absolute leading position in AI, deep learning, cloud computing, and autonomous driving, and its business growth will inevitably drive the entire industry chain upward; secondly, as AI applications become more widespread and expanded, these suppliers will continuously gain new business opportunities. Whether hardware manufacturers, software developers, or service providers, all have the chance to benefit from NVIDIA’s wave of innovation.

Overview of NVIDIA Concept Stocks in the Taiwan Stock Market

In Taiwan’s stock market, the following companies are closely linked to NVIDIA’s business and are worth investors’ attention:

TSMC (2330) — The global leader in chip manufacturing, with high-performance computing (including GPU manufacturing) accounting for over 52% of revenue, surpassing smartphone business to become the largest revenue source. The company plans to mass-produce the most advanced 2nm process chips by 2025, supporting future growth. In the short term, the market generally expects double-digit growth in Q4; long-term, the P/E ratio has room to further decline to 22 times, which remains attractive relative to its industry position.

Quanta Computer (2382) — An AI server manufacturer with extensive collaboration with NVIDIA, covering HGX and PCIe server motherboards, racks, and assembly. The September operational report shows non-PC products account for over 70% of revenue, with AI server business becoming the company’s growth driver. As NVIDIA’s new H200 and B200 series chips ramp up, the company’s performance is expected to continue climbing.

GIGABYTE (2376) — A rising star in the server field, with its subsidiary GigaDevice being a certified NVIDIA supplier. The company’s server business surged from 21% to over 60% within a year, with remarkable growth. Orders for H100/H200 are booming, and next-generation products like GB200 are ready, likely further boosting revenue in 2025.

Vanguard International Semiconductor (2449) — Provides testing services for GPU and FPGA products, with a market share exceeding 50%. Besides GPU testing, the company also has high-speed Ethernet testing platforms, covering the three core components of AI computing. Capital expenditure for 2024 has been increased to NT$13.8 billion, demonstrating management’s confidence in future growth.

ASE (3711) — A leader in semiconductor packaging and testing, providing advanced packaging services for NVIDIA GPUs. Although revenue declined in 2023, the company continues expanding capacity; the groundbreaking ceremony for the new K28 plant in Kaohsiung has just been held. Long-term prospects remain promising. However, in the short term, technical indicators show mixed signals, making market direction hard to determine; investors should temporarily avoid.

Wistron (3231) — A main supplier for NVIDIA’s DGX and HGX servers, also providing GPU substrates. NVIDIA CEO Jensen Huang has explicitly stated that the new supercomputer orders will go to this company, with performance breakthroughs imminent.

MediaTek (2454) — Collaborating with NVIDIA on automotive AI chips; the first smart cockpit chip is expected to launch in 2025, contributing revenue from 2026. Additionally, the two companies are jointly developing PC platform AI chips, which may challenge Intel and AMD’s x86 market dominance.

Notable NVIDIA Concept Stocks in the US Market

For investors looking to expand into the US stock market, the following companies also hold investment value:

Arm Holdings (ARM) — NVIDIA had planned to acquire the company for $40 billion, but the deal fell through. Nonetheless, ARM remains a key holding for NVIDIA, with a stake valued at $147 million. It is rumored that NVIDIA is preparing to launch chips combining new ARM cores with Blackwell GPUs to enter the Windows on ARM market. If ARM develops independent PC GPUs, the potential is even greater. However, ARM’s stock has already gained over 100% YTD and is trading near previous highs, making short-term breakthroughs challenging; caution is advised.

Tech giants such as AMD, Qualcomm, Microsoft, Google, Amazon, and Meta also have indirect connections with NVIDIA through investments in AI infrastructure or chip design, and can be considered for investment.

Comparing the Three Main Ways to Invest in NVIDIA Concept Stocks

For investors interested in entering the market, here is a comparison of three mainstream investment methods:

Direct stock purchase — Participates in company growth opportunities and benefits from dividends, but requires higher initial capital and exposes investors fully to stock price volatility.

Exchange-Traded Funds (ETFs) — Offer diversified allocation, effectively reducing risk associated with individual companies, but NVIDIA’s outstanding performance may be diluted.

Contract for Difference (CFD) — No need to hold actual stocks; leverage can amplify gains, allows for two-way trading, suitable for advanced investors. However, high leverage also increases potential losses.

2024 Outlook for NVIDIA Concept Stocks

Overall, NVIDIA concept stocks are indeed worth attention in 2024, but investors should remain rational:

First, some concept stocks have already experienced significant gains; whether they can continue to rise depends on whether future performance can truly support current valuations. Second, as NVIDIA’s supply chain expands and new entrants join the competition, these companies face potential market share erosion risks.

However, from a long-term perspective, the AI revolution is still in its early stages. NVIDIA’s chip supply remains far from saturated, and emerging applications like Sora will continue to drive market demand. In this industry context, related concept stocks in Taiwan have solid growth fundamentals. Investors should keep tracking industry developments, balancing risks and opportunities to profit from this wave of AI innovation.