Zaid

And Microsoft and Meta are working on their own custom silicon as well.

These hyperscalers just don't want to be reliant on NVIDIA.

So that could hurt NVIDIA's market share and pricing power down the road.

Now, NVIDIA kind of brushed off the competition concerns on the conference call to CFO so that NVIDIA is the king of inference, which I guess is true for now.

But you know, there are a few reasons to be bullish on NVIDIA.

So let's talk about the bull case moving forward and why some people think that NVIDIA is undervalued right now, despite being the most valuable company in the world.

Okay, so I've laid out some real concerns when it comes to NVIDIA, but there are several reasons to believe that NVIDIA's generational run still has legs and that the AI trade is alive and well.

For one, we gotta go back to the hyperscalers.

They're planning to spend $700 billion on CapEx, a lot of that going towards building AI infrastructure.

And the thing is, these companies are starting to see a return on their AI investment.

Nvidia says that the use of generative AI is already delivering measurable results for clients in areas like search optimization, ad generation, recommendation systems, and developer productivity.

Meta is probably the best example of this.

In their recent earnings call, they said that AI is helping them improve ad targeting, which is leading to more revenue.

In fact, Meta saw an acceleration of revenue in the recent quarter.

Google also said something similar in their earnings call.

So I know these CapEx numbers are huge, but as long as these companies are seeing an ROI on their CapEx spend, which it looks like they are now, they're not gonna slow down spending anytime soon.

And I think investors are gonna be okay with it.

Again, as long as revenue is accelerating.

The reality is the more money these companies spend, a lot of that's going to trickle to Nvidia because they still have the best AI chips.

In fact, Nvidia has outlined a $500 billion cumulative revenue opportunity across its Blackwell and upcoming Rubin chip platforms.