Zaid

you know, if there's a pullback on AI spending that some think will happen, maybe NVIDIA could suffer the same fate that Cisco did back during the dot-com crash.

And that's the key question here, right?

Will there actually be a pullback in AI spending, especially from the hyperscalers?

As I mentioned earlier, 50% of NVIDIA's revenues come from Meta, Microsoft, Google, and Amazon.

And these companies are expected to spend close to $700 billion combined on AI infrastructure this year.

But all this CapEx spending is actually wrecking havoc on the balance sheets of

these companies.

Google, Microsoft, Amazon, and Meta are all expected to see a noticeable decline in free cashflow this year.

In fact, Amazon is expected to go into negative free cashflow from all their CapEx spending.

So it's possible the shareholders of these companies might start pushing back and asking whether this CapEx spending is actually worth it.

In fact, the stock price for all the hyperscalers is in the red this year.

If the stock price continues to fall, there's gonna be more pressure on management to potentially scale back CapEx.

And if that happens,

NVIDIA could take a big hit.

And finally, the last concern when it comes to NVIDIA is competition.

Now look, NVIDIA still dominates the AI chip market, but for the first time, it feels like competition is getting serious.

And the reason competition is heating up is because the industry is shifting.

AI is moving from the training phase where you need massive GPU clusters to train frontier AI models, something that NVIDIA chips are really good at,

to the inference phase, which is actually running AI to answer queries from users.

The thing is inference doesn't always require the same level of GPU power that training does.