He Says He Is Not Afraid of Custom Chips. Why Pay US$3.5 Billion?

Jensen Huang said on Monday that he is not afraid of custom chips. The same day, Nvidia put US$3.5 billion into MediaTek convertible bonds and brought MediaTek onto its own NVLink.

He is not trying to keep custom chips outside the door; he wants them running across Nvidia's network. Reports say the tie-up is meant to get custom data-centre chips deployed faster. Nvidia closed 1.48 per cent higher at US$220.78.

On the custom-silicon side, the tape read the opposite way. $Marvell Technology(MRVL)$ fell another 2.29 per cent to US$211.66, and its gain for the year slipped from 154.91 per cent on Friday to 149.07 per cent.

The wound is the same one as last week. Revenue from the US$120 billion arrangement with $Alphabet(GOOG)$ arrives a step later than the share price had assumed. One research house put it more bluntly in its headline: the deal lands in a financial year management will not yet size.

$Broadcom(AVGO)$ barely moved, up 0.42 per cent at US$370.34, and reports after Wednesday's close. J.P. Morgan cut its target from US$580 to US$500 on Monday and kept its Buy rating.

One research note argues that the larger Google's TPU grows inside Broadcom's business, the more it thins the gross margin rather than the profit.

$Advanced Micro Devices(AMD)$ rose 1.10 per cent to US$470.72. What it had to show that day sat with a different sort of customer: governments. The Saudi AI infrastructure it built with Cisco and HUMAIN is live and scaling towards a gigawatt; Finland's €387.8 million sovereign supercomputer picked its MI430X. Another note called sovereign AI a showcase for now rather than a source of revenue.

Cathie Wood sold US$95 million of AMD that day and bought Nvidia and Broadcom. General-purpose and custom: she took the leader on each side.

The large-cap technology name that fell hardest had nothing to do with chips. Alphabet lost 2.18 per cent to US$335.41 after reports that OpenAI's advertising business has reached an annualised US$1 billion, a business Sam Altman once called a "last resort". Bernstein carried the line further, arguing Meta's advertising revenue could pass Google search in 2026.

Two memory names rose, and neither rose on demand.

$SanDisk Corp.(SNDK)$ gained 5.50 per cent to US$1,566.70, and the late-session run came from its inclusion in the MSCI World and ACWI indices — passive money has to buy at the weight on the rebalance date. After hours it gave back 1.06 per cent.

$Micron Technology(MU)$ rose 2.77 per cent to US$958.73, but only 22.57 million shares changed hands against an average of 45.62 million, less than half its usual turnover.

The same research house published two notes that day. Long-term contracts came out as a ceiling at SanDisk and a floor at Micron.

China's CXMT is catching up fast: first-half revenue rose 874 per cent from a year earlier, and Barron's ran two pieces in two days on its share fight with Micron.

At index level, Trump threatened further strikes on Iran, and Brent rose to US$91.28, up 0.87 per cent and around 9 per cent across August. $S&P 500(.SPX)$ fell 0.58 per cent and $Invesco QQQ(QQQ)$ edged up 0.05 per cent. Equities still closed August higher as a month, on two consecutive down days at the end of it.

Oil kept rising, but the two maturities did not move alike. The two-year Treasury yield stood at 4.37 per cent, 0.01 points above the previous session and barely changed; the ten-year reached 4.78 per cent, nearly 0.03 points higher, which reports call the highest since January 2025. What is being repriced looks more like how long inflation lasts than what September does.

$Dell Technologies Inc.(DELL)$ reports after tonight's close. It fell 3.39 per cent on Friday and barely moved on Monday, down 0.05 per cent at US$456.01. Buying a call and a put together costs US$52 in the options market, which works back to a move of about 11 per cent after tonight.

Someone else's chip still has to run on his network, and the US$3.5 billion bought that stretch of road. The road was settled on Monday; the money was not. Marvell's orders are real, the cash just arrives a step later, and the shares have not recovered since. After Wednesday's close, Broadcom has to account for the other half.

The above is personal analysis, not investment advice.

💬 【Talking Point】

Jensen Huang says he is not afraid of custom chips, and on Monday he paid US$3.5 billion to run one designer's chips on his own network. Marvell has Google's orders and its shares are still falling. If designing the chip is not the part that gets you paid, which part is?

💰 【Bounty】

Drop your view in the comments and there are coins in it for you! 🎁

🔔 Better shared than saved — tag a friend and split the coins!