Morgan Stanley Says Nvidia and Broadcom Shielded From AI Power Crunch
Morgan Stanley suggests that Nvidia Corp. (NASDAQ:NVDA) and Broadcom Inc. (NASDAQ:AVGO) may avoid major disruptions from a looming power shortage in the U.S. data-center industry. The bank estimates that a 32-gigawatt power shortfall, or a 34% net deficit, could emerge by 2028 despite efforts like fuel cells and on-site power generation. However, Morgan Stanley believes the companies are well-positioned due to their ability to track chip deployments, geographic flexibility, and collaboration with data centers and power providers. This could allow them to redirect scarce GPUs to projects with secure power, minimizing delays.
The power crunch may instead impact other semiconductor suppliers, particularly those providing memory, optical, power-management, and analog components. Delays in data-center deployments could lead customers to postpone or cancel deliveries of these components, creating inventory disruptions even amid a broader memory shortage. Micron Technology Inc. (NASDAQ:MU) has reported that over 75% of its 2027 output is already committed, suggesting that demand remains strong despite potential deployment delays.
Nvidia CEO Jensen Huang has emphasized the need for AI developers to secure land, power, and infrastructure before installing computing equipment, a process that can take two to three years. Nvidia is already supporting this infrastructure, including providing credit for 4.25 gigawatts at SB Energy’s Ohio campus and investing $1.5 billion in the developer. Meanwhile, prediction markets like Polymarket indicate low odds of an AI-industry downturn, with just a 7% chance by year-end and 19% by mid-2027.