Nvidia Competitive Advantage With Further Push Into Cloud Space

If Nvidia has plan to do this, this would mean that offerings might comes from Nvidia directly next time. Currently, Nvidia are selling their GPUSs to big tech names like Amazon, Microsoft, and Alphabet.

These big tech purchased GPUs to power their own data center, and they are creating or working on Nvidia alternatives, including Amazon's (AMZN) Inferentia chips, Google's TPUs and Microsoft, which is reportedly working with AMD on new AI chips.

I think we might need to watch further development on when DGX Cloud which is currently located in the data centers of Microsoft, Oracle and Alphabet. This seems to cripple Nvidia’s DGX Cloud capabilities.

If we look at the data center chip market, it look like GPU is the highest in 2022 and as forecasted, it is expected to be the same in 2032.

So will there be any threat of big tech companies going for their own chips? I think it might not have significant impact because the chips by the respectively developed is used for specific purpose.

I think it is more important to understand how Nvidia would gain when they really announced the news that they will be having their own data center for hosting GPU-related services.

Nvidia actually have the highest traded on 25 May 2023, this is when they announced a very good earnings which saw their share price surge 24%.

Will we see a similar effect of the new of Nvidia going into Cloud? This will differentiate them from other competitors.

Based on daily returns averaging, NVDA and AMD seem to have the same estimated figure. Nvidia would need to have a competitive advantage which is to make use of its existing technology.

Diversify into an areas where they can still offering customers one-stop service.

Whilst in terms of cumulative returns, we are seeing an impressive returns from Nvidia, no doubt we are seeing some price correction last week, it should be going strong in the long term.

It is a good thing that Nvidia is looking to push into Cloud further with their existing technology. They would have a head start than other companies who might want to do similar plan.

Nvidia GPU technology demand would not be reduced because of big tech building their own chips, there are still demands from non-tech companies who are looking to embark on the A.I. journey.

Appreciate if you could share your thoughts in the comment section whether you think Nvidia would be able to gain a competitive advantage over the big tech whose main business is in data center hosting?

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.