Nvidia trades at 11 times its expected 2029 earnings.

Microsoft, Alphabet and Amazon trade at about 19 times, Apple at 32.

The market is pricing two fears: 1) AI spending could slow 2) Nvidia could also lose its biggest customers.

OpenAI and Anthropic, the two largest AI labs, are cutting their reliance on Nvidia:

▪️OpenAI is building its own chip with Broadcom.
▪️Anthropic trains and runs its models mostly on Google and Amazon chips.

Nvidia’s answer is to give companies a free AI model they can run on their own servers. That’s why Nvidia is putting the chain together:

1. Reflection AI, the model (in talks, $25bn)
2. Hugging Face, the store where developers download models ($13bn)
3. Groq, the technology that runs models fast and cheap ($20bn)

The models become free, and you pay for the chips.