Pricey Chips May Risk Growth

Nvidia faces a precarious balance between maintaining high profit margins and fostering widespread adoption of its chips. Historically, technologies become prevalent with falling prices; thus, Nvidia may struggle to sustain its current price levels without dampening growth prospects. A growing dissatisfaction from major clients like Amazon, Google, and Microsoft regarding pricing signals a potential shift towards self-designed chips, further challenging Nvidia's market position. The emergence of competitors, like AMD, that design chips without manufacturing them, adds to this competitive pressure.