AI Companies Report Strong Sales This Week

This week showed that the artificial intelligence industry is growing faster than many people expected. On January 5th and 6th, Jensen Huang, the leader of Nvidia, made a big announcement at a tech conference. He said Nvidia would make 500 billion dollars from selling their newest computer chips called Blackwell and Rubin through the end of 2026. He also said that number could go even higher. This is really important because Nvidia makes the powerful chips that companies use to build AI systems. When Nvidia's leader said this, you might think their stock would go up a lot, but it actually went down a little bit. Why? Because some investors were already thinking about what would happen in 2027 and wanted to know if Nvidia could keep growing that fast.

Important Chip Maker Confirms AI Boom Continues

On January 13th, something else happened that made everyone more confident about AI's future. Taiwan Semiconductor Manufacturing Company, or TSMC, reported their earnings. TSMC is super important because almost all of Nvidia's computer chips are made there. The company beat what people expected - they earned 2% more money than predicted. But the really big news was that they said they would earn 7% more money in their next quarter than the stock market thought. This was really exciting because it means companies are ordering tons of chips. When TSMC announced this, their stock price jumped up 7%, and Nvidia's stock went up 3%. This shows that when the chip makers say business is good, it helps all the AI companies.

Not Everyone Is Excited Yet

Even with all this good news, the stock market isn't acting super excited about AI companies. On January 15th, the NASDAQ (which is a big list of tech company stocks) was up only 2% for the year so far. But Nvidia, the star of the AI industry, was flat - meaning it hadn't gone up or down much. This is strange because Nvidia is supposed to be the company making the most money from AI. Experts think this means some investors are skeptical - they're not sure if Nvidia can keep growing as fast as everyone hopes. They want to see proof that AI companies will keep buying lots and lots of chips forever.

The Big Test Is Coming Soon

The most important news is what's about to happen. Later this month and maybe into February, the biggest tech companies in the world are going to report their earnings. These companies are Google (owned by Alphabet), Amazon, Meta (which owns Facebook), and Microsoft. All of them are spending huge amounts of money to build AI computers. Right now, experts think these four companies will spend 30% more money on AI computers in 2026. If they say they're going to spend even more than 30% extra, then AI chip makers like Nvidia will probably keep growing super fast. Some experts think hyperscaler capex (which means money spent on computer equipment by giant tech companies) could grow by 40% or even 50% in 2026. This would be amazing news for Nvidia and other AI companies. So the real story for the rest of January is: will the biggest tech companies keep spending lots of money on AI? If yes, then chip makers should keep doing great business. If no, then growth might slow down.