From Nasdaq:

Nividia’s stock has skyrocketed 234% in the past year, reaching over $800 per share and a valuation of almost $2 trillion. With earnings per share up 765% year over year, Nvidia’s dominance in the AI chip market has investors excited for potential hypergrowth in the future.

Despite Nvidia’s strong position, the company’s customer concentration is a concern. A small group of tech giants like Microsoft, Meta Platforms, and Amazon contribute over 50% of Nvidia’s revenue. Reports suggest that these companies are developing their own AI chips, posing a risk to Nvidia’s market dominance.

While Nvidia leads the AI chip market with an estimated 80-90% market share, competition from companies developing custom AI chips could impact Nvidia’s future business. Analysts are raising long-term estimates, but the stock’s price increasingly factors in optimistic growth expectations that may not materialize.

Investors should proceed with caution when considering investing in Nvidia, as the stock may become riskier over time. It’s essential to evaluate Nvidia’s position in the AI chip market and the potential impact of competition from companies developing their own solutions. Considering the market dynamics and risks involved, it’s crucial to make informed investment decisions.



Read more at Nasdaq: Nvidia Surges to $800: Here Is 1 Potential Red Flag Before You Buy Shares