Amazon Strikes New Deal with Nvidia for GPUs
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 hours ago
0mins
Should l Buy NVDA?
Source: NASDAQ.COM
- New Agreement Signed: Amazon has struck a deal with Nvidia to deliver 1 million GPUs by the end of 2027, which is expected to generate tens of billions in revenue for Nvidia over the next two years, indicating sustained demand for Nvidia's products from Amazon.
- Significant Spending Increase: Amazon plans to invest approximately $200 billion in data center construction in 2023, up from $131.8 billion last year, with a large portion allocated for purchasing Nvidia and other chips, highlighting the rapid expansion of the cloud computing market.
- Intensifying Market Competition: CEO Andy Jassy noted that while maintaining a deep partnership with Nvidia, Amazon is increasing its use of its own Trainium chips, which could save the company tens of billions in capital expenditures, posing a threat to Nvidia's market share.
- Future Uncertainty: As cloud providers shift towards proprietary hardware, Nvidia faces unprecedented challenges; despite a relatively low forward P/E ratio, the uncertainty surrounding future earnings growth increases investment risks, prompting investors to proceed with caution.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 211.500
Low
200.00
Averages
264.97
High
352.00
Current: 211.500
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is an artificial intelligence (AI) infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. Its segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing and networking platforms and AI solutions and software, and automotive platforms and autonomous and electric vehicle solutions, including software. The Graphics segment includes GeForce GPUs for gaming and personal computers (PCs), and Quadro/NVIDIA RTX GPUs for enterprise workstation graphics. Its technology stack includes the foundational NVIDIA CUDA development platform that runs on all NVIDIA GPUs, as well as hundreds of domain-specific software libraries, frameworks, algorithms, software development kits (SDKs), and application programming interfaces (APIs). Its platforms address four markets, which include Data Center, Gaming, Professional Visualization, and Automotive.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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