While tensions are rising again, as peace talks trample and as Lithuania declares national emergency over suspicious balloons from Belarus (Moscow’s closest ally), Berlin is on the verge of granting defence contracts totaling the colossal amount of €52Bn, according to Bloomberg. It would include €22Bn for military gear, €4.2Bn for Puma infantry vehicles (from KMW and Rheinmetall), €3Bn for Arrow 3 air defence system (Boeing + Israeli companies) and €1.6Bn for surveillance satellites, among others.

After a significant consolidation and profit-taking move on European defence companies, even more pronounced among German players (-45% on Renk between early-October peak and early-December trough, for example), we see the current setup as an attractive entry point on the sector, as valuations have retreated significantly (now most of the companies are valued at 15-35x P/E 2026, depending on their growth and positioning) and as the market is likely to overestimate the probability of a peace deal, in our view. Beyond that, European countries will need to equip themselves and rebuild their inventories in the mid-term.       

D. Trump trumpeted last night on X that the US will allow Nvidia to sell H200 GPUs to approved Chinese customers and that President Xi responded positively to this proposal. Restrictions on advanced chips led the share of China + Hong Kong in Nvidia’s revenue to fall from 26% in 2021-22 to c. 10% this year (2025-26), despite sales to China tripled over the period (it was massively outpaced by the rest of the business).

Let’s remember here that the target of $500Bn revenue between Q3 2025-26 and Q4 2026-27 (implying c. $378Bn revenue next year) does not take this opportunity into account. UBS calculates adding it may increase Nvidia’s revenue by $5Bn-$10Bn a quarter, i.e., a +5 to +10% upside on next year’s revenue, undeniably a positive for the US chip giant.

Let’s see how this materializes, as China’s final position remains unclear. The FT already reported that Beijing wants to limit access to H200 chips to fuel demand for Chinese alternatives.

This news serves as a reminder to investors of Nvidia’s central role in AI infrastructure and in the technological arms race between the United States and China. The consensus remains shy for next year’s revenue, at $324Bn, in our view, leaving meaningful upside potential.    

In an interview with Joe Rogan last week, Jensen Huang, Nvidia’s CEO, claimed that we should expect a wave of small nuclear reactors (SMRs) to power AI within the next 6–7 years. He emphasized their ability to provide stable baseload energy to ease pressure on electricity grids, as well as the speed at which they can be deployed. SMRs are indeed significantly faster to build (typically between 2 to 4 years vs. 10 to 12 for conventional nuclear plants) while being safer, more compact (20 to 300 MW), and highly modular.

Huang’s public endorsement comes at a time when AI-related electricity demand is surging globally, forcing hyperscalers and governments to reconsider long-term nuclear strategies.

Such commentary on SMRs is not new.  Over the past years, several U.S. political actors and leading technology companies, have expressed growing interest in nuclear energy. About a year ago, AWS CEO Matt Garman indicated that nuclear power, especially SMRs, could become a “very important component” in sustainably powering AI infrastructure and data centers. In addition, the Trump administration signed executive orders to accelerate licensing and deployment of advanced reactors (including SMRs), further reinforcing institutional support. This alignment between political institutions and hyperscalers strengthens the credibility of the SMR deployment outlook.