Big Tech Cash Was a Hammer Seeking an NVIDIA

Well, they did it. I'm happy to report that Jensen Huang saw his shadow and so we will have at least another three months of AI euphoria. I'm "happy" about this because it means that NVIDIA's stock won't collapse when it opens today and thus risk bringing down the entire stock market which is so heavily wrapped around the Big Tech bet. At some point, this seems inevitable, but not today. Phew.

The reason why is because NVIDIA continues to bring in boatloads of money selling their AI wares. They even managed to defy the Law of Large Numbers this quarter and saw that mythical uptick in revenue growth – the first on a sequential basis in a couple of years. Even more impressively, they're projecting another uptick next quarter. No matter how you choose to look at this situation, it's insanely impressive growth.

At the same time, it's growth that is largely fueled by a handful of players. This makes sense, NVIDIA's Big Tech peers are really the only companies that can afford to spend the amounts of money that makes up most of what NVIDIA is now bringing in. This is obvious, but often overlooked: much of NVIDIA's revenue is coming from Big Tech.¹