After driving much of the U.S. stock market rally over the past three years, Nvidia shares are up about 2% so far in 2026. Concerns are rising that major customers, including cloud hyperscalers, may increasingly design their own lower-cost AI chips, News.Az reports, citing Reuters.
Rivals are gaining ground. Advanced Micro Devices is set to unveil a new flagship AI server later this year, while Alphabet’s Google has emerged as a key competitor by supplying its in-house TPU chips to AI startup Anthropic. Media reports also say Google is in talks to supply chips to Meta, one of Nvidia’s largest customers.
RECOMMENDED STORIES
To defend its position, Nvidia last year struck a reportedly $20 billion deal to license chip technology from Groq, boosting its presence in AI inference. It also recently agreed to sell millions of chips to Meta, though financial details were not disclosed.
Investor caution has been reinforced by uncertainty around AI spending sustainability. Nvidia has delayed finalising a potential $100 billion investment in OpenAI, with media reports suggesting it may instead commit about $30 billion.
Wall Street expects Nvidia’s profit for the quarter ended January to have risen more than 62%, according to LSEG data, a slight slowdown from the previous quarter. Revenue is forecast to jump over 68% to $66.16 billion, with analysts projecting first-quarter sales growth of about 64%.
Despite competition, analysts say demand for Nvidia’s high-end AI chips, central to data center expansion, remains strong. Supply constraints at TSMC, however, could limit upside. Potentially resuming AI chip sales to China could provide a boost, with CEO Jensen Huang saying licensing talks are being finalised.
