NVDA - Nvidia: Too Reliant On Too Few Customers
2024-07-08 12:47:36 ET
Summary
- Data Centers account for 86% of Nvidia Corporation's revenues, driven by mega-tech companies like Microsoft spending billions on AI infrastructure.
- A handful of large companies are responsible for around 50% of Nvidia's revenues.
- These companies may reduce spending for a number of reasons, impacting Nvidia's future growth potential.
Last week, I wrote about a small ETF called the WisdomTree Artificial Intelligence and Innovation Fund ETF ( WTAI ) which needs to populate half of its portfolio with companies that make at least 50% of their revenues from AI. The problem is, not many large companies are doing that at the moment. WTAI therefore has a 35% exposure to the only companies making significant revenues from the AI megatrend: semiconductors. The likes of NVIDIA Corporation ( NVDA ) are swimming in revenues as mega-cap tech companies race to build infrastructure....
Nvidia: Too Reliant On Too Few Customers