The Biggest Risk to Nvidia's Stock Price That Almost Nobody Is Talking About

Nvidia’s stock surge tied to the AI boom faces a key risk that the article says is often overlooked, namely how closely Nvidia’s results depend on big tech’s spending cycle. Nvidia, powered by its GPUs used to train and run models such as ChatGPT, saw fiscal 2022 revenue of $26.9 billion, rising to $253.5 billion over the last 12 months, while the stock is up more than 600% since January 2022. The article argues that capex from Meta, Alphabet, Amazon, Microsoft and Oracle—$412 billion last year—currently fuels the demand that supports Nvidia. However, if spending slows, earnings may not reflect the full chip cost immediately due to depreciation timing and delays in data-center buildouts. The “depreciation wall” could therefore emerge as revenue grows before true expenses show in profits.