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Record Profits at Samsung & TSMC Say the AI Trade Is Intact
Despite a questionable macro economy and soaring energy prices, equity markets have been buoyed by the massive, unprecedented artificial intelligence buildout. Just how impactful has the AI revolution been for the U.S. economy and stock market?
The massive wave of CAPEX spending on data centers, graphics processing units (GPUs), and energy has accounted for more than a quarter of total U.S. GDP growth, and now dwarfs every other major American infrastructure boom, including the Interstate Highway System, the Apollo space program, and the 19th-century railroad expansion. In other words, Wall Street's big question is: "How sustainable is AI spending?" The answer matters not only to the AI industry, but also for the U.S. economy and stock market as a whole.
Below are three clues that AI spending is sustainable for the foreseeable future, including:
Samsung's Record Profit
Samsung Electronics is the world's largest memory manufacturer. AI data centers have driven insatiable demand for memory over the past few years. Last night, Samsung's earnings gave investors clues about AI spending. Samsung reported the most profitable quarter ever by any company ($80.2 billion). Samsung's main customers include Qualcomm, Alphabet,Tesla, Advanced Micro Devices and Amazon.
Taiwan Semiconductor Reports Record Revenue
Memory makers aren't the only ones showing that AI growth remains scorching-hot. Taiwan Semiconductor, the world's largest manufacturer of AI chips, reported record Q3 revenue of $46.7 billion, up 50% year over year. TSM is a critical AI company to watch because it produces over 60% of all global contract chips and over 90% of advanced chips. NVIDIA, AMD, QCOM, Intel, Apple and Broadcom are all TSM customers.
SpaceX Raises Money for Compute
Earlier this week, SpaceX announced it will raise $40 billion in debt to buy NVIDIA chips as it scales its AI compute. Although investors often frown upon debt offerings, SpaceX's compute economics are mind-boggling. For every dollar SpaceX spends bringing on AI compute, it's payback period is well under one year, thanks to lucrative deals with Google and Anthropic. In other words, SpaceX is proving that n AI compute investing not only makes sense, but the economics are also extremely attractive.
Bottom Line
The sustainability question about the AI infrastructure buildout has been answered. Recent news from Samsung, TSMC, and SpaceX suggests record CAPEX spending will continue.
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Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Qualcomm, Alphabet, Tesla, AMD, Amazon, Taiwan Semiconductor, NVIDIA, Intel, Apple, Broadcom and SpaceX
For Immediate Release
Chicago, IL – October 12, 2026 – Today, Zacks Investment Ideas feature highlights Qualcomm (QCOM - Free Report) , Alphabet (GOOGL - Free Report) , Tesla (TSLA - Free Report) , Advanced Micro Devices (AMD - Free Report) , Amazon (AMZN - Free Report) , Taiwan Semiconductor (TSMC), NVIDIA (NVDA - Free Report) , Intel (INTC - Free Report) , Apple (AAPL - Free Report) , Broadcom (AVGO - Free Report) and SpaceX (SPCX - Free Report) .
Record Profits at Samsung & TSMC Say the AI Trade Is Intact
Despite a questionable macro economy and soaring energy prices, equity markets have been buoyed by the massive, unprecedented artificial intelligence buildout. Just how impactful has the AI revolution been for the U.S. economy and stock market?
The massive wave of CAPEX spending on data centers, graphics processing units (GPUs), and energy has accounted for more than a quarter of total U.S. GDP growth, and now dwarfs every other major American infrastructure boom, including the Interstate Highway System, the Apollo space program, and the 19th-century railroad expansion. In other words, Wall Street's big question is: "How sustainable is AI spending?" The answer matters not only to the AI industry, but also for the U.S. economy and stock market as a whole.
Below are three clues that AI spending is sustainable for the foreseeable future, including:
Samsung's Record Profit
Samsung Electronics is the world's largest memory manufacturer. AI data centers have driven insatiable demand for memory over the past few years. Last night, Samsung's earnings gave investors clues about AI spending. Samsung reported the most profitable quarter ever by any company ($80.2 billion). Samsung's main customers include Qualcomm, Alphabet, Tesla, Advanced Micro Devices and Amazon.
Taiwan Semiconductor Reports Record Revenue
Memory makers aren't the only ones showing that AI growth remains scorching-hot. Taiwan Semiconductor, the world's largest manufacturer of AI chips, reported record Q3 revenue of $46.7 billion, up 50% year over year. TSM is a critical AI company to watch because it produces over 60% of all global contract chips and over 90% of advanced chips. NVIDIA, AMD, QCOM, Intel, Apple and Broadcom are all TSM customers.
SpaceX Raises Money for Compute
Earlier this week, SpaceX announced it will raise $40 billion in debt to buy NVIDIA chips as it scales its AI compute. Although investors often frown upon debt offerings, SpaceX's compute economics are mind-boggling. For every dollar SpaceX spends bringing on AI compute, it's payback period is well under one year, thanks to lucrative deals with Google and Anthropic. In other words, SpaceX is proving that n AI compute investing not only makes sense, but the economics are also extremely attractive.
Bottom Line
The sustainability question about the AI infrastructure buildout has been answered. Recent news from Samsung, TSMC, and SpaceX suggests record CAPEX spending will continue.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.