Investors face rising competition and earnings uncertainty for Nvidia, despite a relatively low forward earnings multiple.

The outlook for Nvidia is mixed: sustained sales momentum from AWS but rising competitive pressure as cloud providers expand their own AI accelerators, which could cap Nvidia’s long-term earnings growth.

AWS is enabling non-Nvidia accelerators through its Bedrock service, with Trainium workloads currently dominating Bedrock, signaling a shift away from Nvidia for some tasks.

Amazon is expanding its Trainium chips and Bedrock, enabling multiple foundation models on AWS and increasing adoption of non-Nvidia accelerators.

CEO Andy Jassy emphasized that Bedrock makes non-Nvidia accelerators more accessible, potentially diluting Nvidia’s dominance by offering alternative chips like Trainium.

Amazon and Nvidia share a strong existing relationship, with AWS planning to receive a large shipment of Nvidia GPUs by 2027, underscoring a multi-year revenue base for Nvidia.

Amazon remains a major Nvidia customer and has a new deal to purchase more GPUs, with expectations of tens of billions in Nvidia revenue over the next two years from AWS.

The deal to deliver 1 million Nvidia GPUs to Amazon by end of 2027 signals robust demand from AWS and other Nvidia components.

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The coverage frames Nvidia’s future as pivotal, shaped by customer diversification toward custom chips and AWS’s dual role as a customer and platform for evolving acceleration strategies.

Despite ongoing partnerships, the shift toward cloud providers’ own accelerators creates uncertainty about Nvidia’s long-term earnings growth and valuation.

Other hyperscale cloud providers, including Alphabet and Microsoft, are pursuing their own custom chips to cut costs and differentiate, intensifying pressure on Nvidia.