From Nasdaq: 2024-06-24 07:30:00

Nvidia’s GPUs are in high demand from big tech companies for their AI needs. However, many companies are renting GPUs in massive servers, rather than purchasing them. Cloud computing providers like Amazon, Microsoft, and Alphabet dominate the market, offering more attractive business models than Nvidia.

Investing in cloud computing providers may be a smarter move than investing in Nvidia due to their recurring rental revenue model. Amazon’s AWS, Microsoft’s Azure, and Alphabet’s Google Cloud hold a significant market share and offer high-margin services.

Amazon’s AWS accounts for 18% of its sales, with high margins driving operating profits. Microsoft’s Azure saw revenue growth of 31% year over year, contributing significantly to its Intelligent Cloud division. Google Cloud, with a focus on AI workloads, is slowly improving profitability and attracting AI start-ups.

Cloud computing providers offer great investment potential as AI integration in business increases. While these companies can’t be bought individually, they present a lucrative alternative to investing in Nvidia for those looking to capitalize on the AI industry’s growth.



Read more at Nasdaq: The Cloud Titans Are Powering the Artificial Intelligence Revolution. Time to Buy?