Nvidia's Top Customer May Be Microsoft, Accounting For A Fifth Of Its Revenue: Report
In a recent report, it was suggested that NVIDIA Corp (NASDAQ:NVDA) has one customer that contributes to a significant portion of its revenue, with Microsoft Corp (NASDAQ:MSFT) being the likely candidate.
What Happened: A UBS note speculated that Microsoft might be Nvidia’s largest indirect customer, responsible for 19% of the chipmaker’s revenue in fiscal 2024, reported CNBC.
The report highlighted that Nvidia’s revenue is heavily reliant on a few major customers, with Microsoft possibly being the most significant. This revelation comes at a time when Nvidia’s sales are soaring, largely due to the demand for its advanced processors for artificial intelligence technology.
Despite the uncertainty surrounding Microsoft’s status as Nvidia’s top customer, the speculation has drawn attention to the influential role the chipmaker plays in the market. Nvidia’s stock has surged by 130% this year, and its market cap is approaching $3 trillion.
Artificial intelligence companies have captivated the markets, with AI poised to significantly disrupt various industries. Investors are increasingly pouring funds into AI exchange-traded funds to diversify their portfolios.
Those interested in AI ETFs might consider some of the largest options, such as the Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ), the Global X Artificial Intelligence & Technology ETF (NASDAQ:AIQ), and the ROBO Global Robotics and Automation Index ETF (NYSE:ROBO).
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Why It Matters: This revelation comes at a time when Nvidia’s CEO, Jensen Huang, is set to join other industry leaders at Taiwan’s AI Tech Fest. The event is expected to be a major gathering of AI and chip industry leaders, where the future of the sector could be shaped.
Meanwhile, the U.S. government has recently put a hold on AI chip sales to the Middle East, citing national security concerns. This move could have significant implications for Nvidia, which is a major player in the AI chip market.
On the other hand, Nvidia’s strong performance has led to speculation that it could soon surpass Microsoft in market value. This would further solidify Nvidia’s position as a key player in the tech industry and could have far-reaching implications for the market as a whole.
Price Action: Nvidia closed at $1,105.00 on Thursday, down 3.77%, though it is up 129.41% year to date. Microsoft ended the day at $414.67, down 3.38%, and is up 11.81% year to date, according to the data from Benzinga Pro.
Image Via Shutterstock
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote