We recently published 10 Stocks Everyone’s Talking About as AI Investments Continue. NVIDIA Corporation (NASDAQ:NVDA) is one of the stocks that analysts were talking about recently.
Stacy Rasgon, senior semiconductor analyst at Bernstein, was recently asked about the $100 billion deal between NVIDIA Corp (NASDAQ:NVDA) and OpenAI and what it indicates. The analyst said the deal shows there is a “shortage” of computing power and that customers are lining up early.
“I mean, one of the big overarching themes seems to be the computing shortage. Everyone who’s involved in this seems to still be struggling to get computing. And I think that’s part of it, and you know, Jensen has thrown out some big numbers about what he thought infrastructure spending would be by the end of the decade. I think he said between three and four trillion (like, who knows, I don’t know how big), but I do think it’s big. Then you have that. I think the question of power is very interesting. I think customers are reserving power for these types of investments years in advance because the electrical infrastructure as it is does not exist; That has to be put in front. People have really thought about whether or not power might be the main limitation as we ramp all of this up over time. It may not even be computational. Over time, I mean.”
The current AI boom cycle is due to spending by major technology companies, and Nvidia is the biggest beneficiary of this spending. In the second quarter of fiscal 2026, three direct customers accounted for 23%, 19% and 14% of NVDA’s accounts receivable. Almost all of the company’s revenue comes from spending on AI-related infrastructure. In the latest quarter, $41.3 billion of $46.7 billion in revenue came from these customers. The music could stop for Nvidia if these large companies decide to reduce their expenses due to the lack of return on investment. If investors sense weakness in CapEx spending and the market begins to falter, NVDA’s share price would be the first to see its impact.
Baird Chautauqua International and Global Growth Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in their Q2 2025 Investor Letter:
“NVIDIA Corporation (NASDAQ:NVDA) reported first-quarter results that were extremely strong. The company took a write-down on China-specific data center products and removed any future contributions from China from its guidance, following new export restrictions introduced in April. Feedback on demand outside of China was extremely encouraging: Nvidia is exceeding expectations despite supply constraints and outperforming competing ASIC products by a wide margin. “We are underweight Nvidia relative to the benchmark, which is up 46% in the quarter, given our near- to medium-term concerns that feverish AI data center construction may be leading to excess capacity, which has not materialized.”