Posted 2/29/2024, 10:02:00 AM
Nvidia Soars on AI Chips, But Faces Risk as Big Customers Develop Alternatives
- Nvidia stock has surged over 230% in the past year to nearly $2 trillion valuation on AI chip dominance
- But 6 big tech companies account for over 50% of Nvidia's revenue - concentration risk
- Companies like Meta, Microsoft, Amazon, Alphabet developing own AI chips to reduce reliance on Nvidia
- While AI chip market will grow massively, Nvidia risks losing major customers to in-house alternatives
- Buying Nvidia stock at current levels assumes continued customer concentration and growth