Nvidia reports record profits, but Amazon emerges as the most attractive bet in AI

Chipmaker Nvidia will announce its results for the first quarter of fiscal 2027 on May 20, with revenue projected to be around US$78 billion, growing approximately 75% year-on-year. The company’s shares reach historic highs, valued at around 21% year to date. Porém, analysts point out that the premium valuation and growing competition from custom chips reduce the buying appeal for new investors.

Nvidia’s extraordinary growth trajectory faces pressure from a critical factor: its own customers build alternatives. Google, Amazon, Meta and OpenAI already develop or order custom artificial intelligence chips. Nvidia’s price-to-earnings ratio sits around a 46 multiple which leaves little room for disappointment.

Accelerated Crescimento Faces Demand Limit

In the fourth fiscal quarter, Nvidia achieved record revenue of US$68.1 billion, up 73% year-over-year. The data center segment generated US$62.3 billion, an increase of 75% year over year. Redes accounted for US$11 billion, growth of more than 3.5 times. The pace accelerated from 62% in the third quarter to the current performance.

Apesar’s momentum, there is a critical side to the story. The biggest buyers of cloud and artificial intelligence are working discreetly to reduce dependence on the manufacturer. Broadcom, partner of Nvidia, has signed a long-term agreement with Google until 2031 to supply customized tensor processing units. The company also develops accelerators for OpenAI with Meta in a 10 gigawatt partnership, in addition to providing custom silicon for Meta for years.

Viable Alternativas Gain Market Traction

Essa list represents clients among Nvidia’s most important. Broadcom occupies a central position in the supplier diversification strategy. Demand for Blackwell and Nvidia chips remains robust, and the hardware remains the standard choice for cutting-edge AI training. Contudo, as alternatives mature, the manufacturer’s pricing power may experience compression risk that is not adequately reflected in the current valuation.

Tech giants seek to:

• Reduzir dependence on a single chip supplier
• Desenvolver customized solutions for your specific operations
• Negociar best price and delivery conditions
• Integrar proprietary technology in its data centers

Amazon Offers More Diversified Exposure to the AI ​​Boom

Amazon emerges as a more attractive alternative for investors who want to take advantage of the growth of artificial intelligence chips. The company’s chip business that includes Trainium, Graviton and Nitro has surpassed the $20 billion mark in annual revenue. Growth occurs at a triple-digit pace year after year, according to the release of results for the first quarter of 2026.

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CEO Andy Jassy stated on the earnings call that if the custom silicon operation were independent, annual revenue would reach approximately US$50 billion, a level that would place the division among the three largest data center chip businesses in the industry. Esse growth occurs simultaneously with the advancement of Amazon Web Services. AWS revenue in the first quarter grew 28% year-over-year to $37.6 billion with an operating margin of 37.7%.

Demanda insatiable for Amazon’s custom chips

Amazon has over $225 billion in revenue commitments tied to Trainium alone. Leading AI model developers OpenAI and Anthropic have already allocated gigawatts of capacity to Amazon chips. Trainium2 is practically sold out. Trainium3 started distribution in early 2026. Grande part of Trainium4 has already been reserved by customers.

Essa custom chip strategy strengthens Amazon’s own cloud operation, creating virtuous circle. Investimentos of the company’s capital reached US$43.2 billion in the first quarter alone, with a target of around US$200 billion for the year 2026. Gastos of this magnitude poses risk if the demand for AI computing slows down abruptly.

Ainda thus, Amazon offers diversification that Nvidia does not have. The e-commerce and cloud computing giant combines consolidated cloud computing dominance with a rapidly expanding portfolio of custom chips. Amazon shares were trading at approximately 32 times earnings at a significant discount to Nvidia. Essa’s more moderate valuation may be better suited for a company whose chip business is growing as fast as or faster than that of the leader in artificial intelligence chips.

Long-term Perspectiva favors diversification

Para investors currently evaluating resource allocation in artificial intelligence chips, Amazon represents a more defensive bet with greater potential for return. The company has a core cloud infrastructure business that generates robust cash flow regardless of fluctuations in demand for custom chips. Nvidia, in turn, is almost entirely dependent on continued momentum in data centers and lack of price compression.

The competitive trajectory of the artificial intelligence chip market suggests that pricing power will tend to normalize as new viable options mature. Amazon positions itself more securely in this scenario, combining accelerated growth in custom chips with a stable and profitable business base.