Strategy Simplified S18E8: NVIDIA Beats and Avocado Supply Spurs Demand (Market Outsiders: May 29, 2025)
May 29, 2025
Dive into the fascinating interplay between technology and agriculture. The discussion highlights NVIDIA's impressive earnings and its critical role in the tech landscape. There's a surprising twist as California avocado growers thrive, showcasing that competition can enhance market strength. The hosts explore how these seemingly unrelated sectors connect through pricing power and supply chain dynamics. From AI's accessibility to the unexpected significance of guacamole, this conversation weaves engaging insights into modern market behaviors.
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NVIDIA’s Data Center Durability
- NVIDIA’s data center revenue grew 73% last quarter, showcasing highly durable and scalable income.
- This segment drives high margins and underpins NVIDIA’s stock strength despite market expectations.
NVIDIA’s Onshoring and Pricing Power
- NVIDIA plans to manufacture 100% of its chips in the US by end of 2025 to avoid supply risks.
- Their pricing power allows passing increased manufacturing costs onto consumers, ensuring business resilience.
Customer Concentration Risk
- NVIDIA's revenue depends heavily on a few tech giants who collectively ramp up AI infrastructure spending.
- This customer concentration poses long-term risk but currently supports strong capex-driven demand.