CoreWeave Anchors Applied Digital, Broadcom’s AI Inflection Point, Nvidia’s Next-Gen Factories
Welcome, AI & Semiconductor Investors,
Applied Digital’s Ellendale campus just locked in a 250 MW lease with CoreWeave—an unmissable signal that hyperscale power availability is shifting to the Midwest. Meanwhile, Broadcom’s Q2 guidance hinges on a $4.4 billion AI-chip surge and VMware synergies that could reshape its growth trajectory. And don’t overlook Nvidia’s “AI factories” ramping Blackwell GPUs, even as export controls force a $4.5 billion write-down— Let’s Chip In
What The Chip Happened?
🤖 Applied Digital’s 250MW AI Data Center Lease With CoreWeave: North Dakota
☄️ Broadcom Gears Up for AI-Infused Q2 Blast
🟢 Nvidia’s AI Factories Go Big: Q1 FY26 Surge
[NVIDIA Drives Data Center Growth Despite Export Hurdles]
Read time: 7 minutes
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Applied Digital (APLD), CoreWeave (CRWV)
🤖 Applied Digital’s 250MW AI Data Center Lease With CoreWeave: North Dakota
What The Chip: Applied Digital has signed two approximately 15-year lease agreements with CoreWeave for a 250MW AI and high-performance computing deployment at its Ellendale, North Dakota campus, announced on June 2, 2025. The company expects about $7 billion in total revenue over the term, with the option to expand an additional 150MW—making Ellendale a major hub for next-generation compute.
The Situation Explained:
🚀 Major Power Play: The Ellendale campus can scale to 1 gigawatt in time, with this initial phase covering 400MW of critical IT load. Applied Digital geared the site to handle high-density AI workloads while ensuring flexibility.
🔋 Phased Build-Out: The first 100MW data center is slated to go live by Q4 2025, generating early revenue. A second 150MW facility follows by mid-2026, with another optional 150MW on the horizon by 2027.
💰 Backed By Big Financing: The project has strong financial support, including up to $5 billion from Macquarie Asset Management and $375 million from Sumitomo Mitsui Banking Corporation. This capital framework helps keep timelines on track.
🏗️ Construction Progress: Generators, backup systems, and key equipment are largely in place for the first data center. Applied Digital expects to start powering up in October. CapEx ranges from $10 million to $13 million per MW for these facilities.
💡 Low-Cost Energy Advantage: Located in North Dakota, Ellendale benefits from abundant, low-cost power and cooler climates—both critical for energy-hungry AI and HPC servers.
🗣️ Leadership Quote: “We believe these leases solidify Applied Digital’s position as an emerging provider of infrastructure critical to the next generation of artificial intelligence,” said Wes Cummins, Chairman and CEO of Applied Digital.
✨ Big Vision: Management sees Ellendale as a “launchpad for the future of AI infrastructure,” aiming to capture surging AI and HPC demand alongside a major anchor tenant like CoreWeave.
Why AI/Semiconductor Investors Should Care: Large-scale AI compute is one of the fastest-growing needs in tech, and Applied Digital is positioning itself at the heart of this trend. This deal brings long-term revenue visibility and underscores the ongoing demand for high-performance data center infrastructure. As AI and HPC adoption accelerates, investors stand to benefit from companies that secure reliable power sources, scalable capacity, and strategic customer partnerships.
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Broadcom (NASDAQ: AVGO)
☄️ Broadcom Gears Up for AI-Infused Q2 Blast
What The Chip: Broadcom reports fiscal Q2 results on June 6, and Wall Street expects $14.9–15.0 billion in revenue—up about 20% year-over-year. Investors want to see how AI-chip revenue (guided at $4.4 billion) is trending and whether VMware’s integration can help sustain Broadcom’s impressive momentum.
The Situation Explained:
🔋 AI Demand Still Surging: Management guided $4.4 billion in Q2 AI-chip sales, and some analysts see +40% annual growth. CEO Hock Tan (Broadcom’s long-time chief) said they’ve expanded total AI market opportunities to nearly $200 billion—a big leap from earlier estimates.
🚀 Google Partnership & TPU Tailwinds: Google’s new Ironwood TPU ramp should boost Broadcom’s custom-silicon revenue and high-margin optical I/O business well into 2026. Even if MediaTek enters the design mix, insiders say Broadcom still controls 60–70% of Google’s AI ASIC pipeline.
🤝 VMware Integration: The VMware acquisition broadens Broadcom’s software reach. Early cross-selling progress matters, as the combined chip-and-software business could nearly triple infrastructure-software revenue to $21.5 billion by FY24.
⚠️ Regulatory & Competitive Risks: European complaints about VMware’s licensing, plus Apple’s potential in-house Wi-Fi/Bluetooth designs, could hurt Broadcom’s wireless business and carry legal or reputational risk.
💸 Valuation & Leverage: Shares jumped about 25% in May, and net debt will top $57–66 billion post-VMware, so any hiccup in synergy capture or AI growth might cause a pullback.
🌐 Nvidia ‘NVLink Fusion’ No-Show: Broadcom skipped Nvidia’s new NVLink partner slide because it’s betting on open interconnects (like UALink) and continuing to own the Ethernet switch space rather than licensing closed Nvidia IP.
Why AI/Semiconductor Investors Should Care: Broadcom’s ability to capitalize on AI-networking chips, custom silicon for hyperscalers, and the VMware integration could shape its long-term growth trajectory. If AI revenue outpaces expectations, shares might break new highs—but watch for updates on regulatory scrutiny and wireless insourcing that could weigh on sentiment. For investors, this quarter’s results and commentary may confirm whether Broadcom remains a cornerstone AI pick or faces near-term speed bumps.
Nvidia (NVDA)
🟢 Nvidia’s AI Factories Go Big: Q1 FY26 Surge
What The Chip: Nvidia just reported its Q1 Fiscal 2026 earnings on May 28, 2025, delivering a whopping $44 billion in quarterly revenue—up 69% year-over-year. The company credited booming Data Center demand, fueled by accelerated adoption of AI and a record Blackwell GPU ramp. Export controls on its H20 chips for China were a headwind, but overall growth remained remarkably strong.
The Situation Explained:
🔋 Data Center Revenue Powers Up: Data Center revenue soared to $39 billion, up 73% from last year. CEO Jensen Huang noted, “We are witnessing a sharp jump in inference demand” as complex AI workloads balloon.
🤖 Blackwell GPU Ramps Fast: The new GB200 NVL72 racks deliver up to 30x higher inference throughput on advanced language models. Major cloud providers are buying “tens of thousands” of these GPUs weekly.
🌐 China Export Challenges: Nvidia recognized a hefty $4.5 billion write-down on H20 inventory and purchase obligations due to the sudden April 9 export control changes. Huang warned losing the $50 billion China market could benefit foreign competitors.
🏭 US Onshoring & AI Factories: Despite China challenges, Nvidia sees an “era of robotics” and “tens of gigawatts” of future AI infrastructure worldwide. TSMC, Foxconn, and others are building capacity in the U.S. with “substantial long-term purchase commitments” from Nvidia.
🚀 Enterprise & Sovereign AI: Jensen highlighted new AI factories in Saudi Arabia, the U.A.E., Taiwan, and more. Nvidia is also pushing new on-prem enterprise solutions, like the DGX Spark desktop AI supercomputer, to integrate AI at every corporate level.
🎮 Gaming Sees Record Quarter: Gaming revenue hit $3.8 billion, thanks to strong demand for the Blackwell-powered GeForce line and the upcoming Nintendo Switch 2 featuring Nvidia’s custom RTX GPUs with AI-based rendering.
🌎 Networks Get “Supercharged”: Nvidia’s Spectrum-X for AI-driven networking and NVLink 72 for “scale-up” computing posted major gains. Networking revenue reached $5 billion in Q1, up 64% quarter-over-quarter.
💬 Quotes from Management:
“We are witnessing a sharp jump in inference demand.” – Jensen Huang, CEO
“Blackwell contributed nearly 70% of Data Center compute revenue in the quarter.” – Colette Kress, CFO
Why AI/Semiconductor Investors Should Care: Nvidia’s results show the rising importance of AI “factories” as a new form of critical infrastructure, with hyperscale data center build-outs accelerating. Despite near-term export restrictions and the write-down in China, demand for inference and sovereign AI solutions could continue to propel growth. Investors should watch whether Nvidia can sustain its leadership in AI hardware—and how onshoring trends and new export rules reshape both its supply chain and global TAM.
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Disclaimer: This article is intended for educational and informational purposes only and should not be construed as investment advice. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions.
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[Paid Subscribers] NVIDIA Drives Data Center Growth Despite Export Hurdles
Date of Event: May 28, 2025
Executive Summary
*Reminder: We do not talk about valuations, just an analysis of the earnings/conferences
NVIDIA Corporation posted its first quarter fiscal 2026 results on May 28, 2025. The company reported revenue of USD 44 billion, up 69% compared to the same quarter last year, underscoring the continuing surge in demand for accelerated computing solutions. Data Center revenues, at USD 39 billion, saw a particularly pronounced increase of 73% year-over-year, largely driven by NVIDIA’s Blackwell architecture ramp and strong demand for large-scale artificial intelligence (AI) workloads.
Despite this growth, management highlighted major disruptions in China, where a new U.S. export control on the H20 GPU product line took effect on April 9, 2025. The CFO, Colette Kress, explained that while H20 had represented significant sales prior to the policy change, it will no longer be available to Chinese customers. Consequently, NVIDIA recognized a USD 4.5 billion charge to write down H20 inventory and related purchase obligations tied to anticipated orders that can no longer be shipped. This charge offset strong gains across multiple product categories, including higher-margin Data Center SKUs, robust sales of Blackwell-based gaming GPUs, and expansions in networking solutions.
During the conference call, CEO Jensen Huang highlighted growing demand in sovereign AI projects around the globe, the continued build-out of AI infrastructure in the enterprise space, and the compelling performance of their Blackwell GPUs for inference workloads. According to Huang, “AI is growing faster and will be larger than any platform shifts before,” reflecting the company’s belief that these developments remain in their early stages.
Below is a closer look at NVIDIA’s key financial metrics, an overview of notable management comments, potential growth drivers, product roadmap, headwinds, and strategic guidance.
Growth Opportunities
AI Factory Build-Out
NVIDIA attributes a significant portion of its Data Center momentum to AI-focused data center (sometimes referred to as “AI factories”) deployments. The CFO noted that there are “nearly 100 NVIDIA-powered AI factories in flight,” a figure that has doubled year-over-year. These AI factories range across industries such as telecommunications, finance, automotive, and retail. Governments worldwide, including those of Saudi Arabia, the UAE, Taiwan, and other nations, are increasingly investing in sovereign AI clouds—a major driver for NVIDIA’s accelerated computing products and networking hardware.