Will NVIDIA, as it is, be the next Amazon AWS?

In the opinion of Ron Miller and Alex Wilhelm, columnists at US technology blog TechCrunch, NVIDIA and Amazon's cloud services arm AWS have something striking in common.

For starters, their core businesses were born out of a lucky accident. For AWS, it realized it could sell internal services, including storage and compute, to the outside world. For NVIDIA, GPUs designed for gaming are also well suited to handle AI workloads.

This has culminated in an explosion of revenue for NVIDIA in recent quarters. NVIDIA's revenue has been growing at a triple-digit rate, from $7.1 billion in the first quarter of fiscal 2024 to $22.1 billion in the fourth quarter of fiscal 2024. That's a pretty impressive trajectory, even though the vast majority of that growth has come from the company's data center business.

While Amazon has never experienced such rapid growth, AWS has always been the e-commerce giant's primary source of revenue. Over the years, AWS has grown into a lucrative business with a current operating value of nearly $100 billion, and would be a highly successful company even apart from Amazon. However, with Microsoft and Google entering the fray, the cloud computing market has become a "three-legged race".

NVIDIA could face the same problem, which is that other chipmakers will eventually start to gain meaningful market share. If competition in the GPU market begins to intensify, NVIDIA does have other businesses, but the revenue size of these businesses is much smaller, and the growth rate is much slower than the GPU data center business. $NVIDIA(NVDA.US)$ $Amazon(AMZN.US)$