Compute & semis
Picks and shovels of the AI capex cycle. Revenue, book-to-bill, and the gap between hyperscaler capex commitments and supplier output.
Where it standsAI compute revenue across the basket grew approximately +47% YoY in Q3'25, fourth consecutive quarter above +30%. Book-to-bill stays above 1.0 across NVDA, AMD, AVGO.
What it meansCapex cycle still feeding through. NVDA data-center revenue is the cleanest read; AVGO custom-silicon ramp is the second derivative.
Why it mattersLargest single-purpose capex print in history is flowing through these names. Slowing here is the first leading signal that hyperscaler capex is decelerating.
ActionStay overweight NVDA, AVGO, TSM. Watch ASML lithography orders for 2026 capacity signal. Trim if NVDA data-center growth prints below +25% YoY for two quarters.
Compute basket revenue vs hyperscaler capex
ActionBoth lines accelerating in lockstep. Stay long; the cycle is intact. Reverse the call when the gap inverts.
Book-to-bill ratio
ActionAll names except ASML above 1.0. Watch ASML; book-to-bill is the leading edge of the basket.
NVDA data-center revenue share
ActionDC concentration is the bull case AND the risk: a single customer category is now ~88% of NVDA revenue. A hyperscaler capex pause goes straight through.
Names in this pillar
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Watch items
- ASML lithography orders (lead indicator for 2026 capacity)
- NVDA Q4 data-center growth — threshold: below +25% YoY for two quarters = trim signal
- Hyperscaler capex guide changes at quarterly earnings
- US-China export-control updates (HBM, advanced lithography, EDA)
Data: Finnhub financials_reported (revenue), Yahoo daily closes (basket sparklines), aggregated capex from /api/edgar.js (hyperscaler companyfacts XBRL). Action notes are heuristic, not formal forecasts.