The numbers are impressive, the stock keeps climbing, and Wall Street can’t stop cheering. But take a closer look, and the cracks in Nvidia’s foundation become impossible to ignore. More than 30% of its revenue is tied to just three companies. That’s not just a small risk—it’s a massive red flag.
Nvidia won’t say it outright, but industry analysts have pieced it together. The three customers propping up its explosive growth? Microsoft, Amazon Web Services (AWS), and Google. These tech giants are spending billions on Nvidia’s AI chips, turning the company into the undisputed king of data centers and artificial intelligence. The demand is outpacing supply, and Nvidia holds all the pricing power. That’s great—for now.
The new Blackwell GPU architecture is the latest cash machine, delivering a massive leap in performance over the previous Hopper generation. AI companies are scrambling to get their hands on these chips, throwing money at Nvidia as fast as they can. This is the kind of dominance that fuels stock market frenzies. But here’s the problem—what happens when the spending slows?
Right now, Nvidia looks invincible. The AI boom is feeding its meteoric rise, and every major tech company is paying whatever it takes to secure its place in the future of artificial intelligence. But when three customers control a third of your business, you don’t really own the future—you depend on their budgets.
If Microsoft, AWS, or Google decide to cut back on AI spending, even slightly, Nvidia’s revenue takes a hit. If competition heats up and these companies start developing their own chips—something they’re already working on—the dependency on Nvidia shrinks. That’s the risk Wall Street doesn’t want to acknowledge.
For now, the stock keeps soaring, and the orders keep flowing in. But this kind of reliance on a few deep-pocketed customers isn’t a sign of stability—it’s a warning. When the AI gold rush slows, Nvidia won’t just feel it. They’ll crash headfirst into it.
Sources:
https://investor.nvidia.com/financial-info/financial-reports/default.aspx
https://www.fool.com/investing/2024/11/28/36-nvidias-35-billion-revenue-3-mystery-customers/