I agree, Zoom is different for a number of reasons, mainly because the supply was readily available to meet the demand, amazingly, even though the demand went parabolic. (Although the question of “when” is similar and as @mizzmonika says, she was eventually right on Zoom…I will eventually be "right on Nvidia…but it might double again before I am!)
I wish I had more data on Cisco as @anthonyms mentions. I do think that’s a better analog. My common sense thought is that when you become the 1st or 2nd biggest company in the world, demand must be pretty close to peaking, because how much more can all the other companies afford to spend on your products? But that’s just my gut.
It would be great to know more about TSM’s ability to provide Nvidia with more chips, but I think it’s probably more useful to continue to focus on the demand side. There’s an article on the Fool’s own site (admittedly by an Nvida bear, AFAICT) that suggests demand might peak this year. Here’s a snippet:
The problem for the infrastructure backbone of the AI movement is that its four largest customers by revenue are actively developing AI chips of their own to complement the Nvidia GPUs they’ve been purchasing for their high-compute data centers…
The other issue is that even if Microsoft, Meta, Amazon, and Alphabet continue to purchase Nvidia’s GPUs, we’re more than likely witnessing a peak in orders in 2024.
For example, Meta spent almost $27.3 billion on property and equipment last year. The 350,000 H100 GPUs the company is purchasing from Nvidia will come at a cost of up to $10.5 billion. That’s a pretty sizable percentage of Meta’s annual capital expenditures coming from a single purchase, which almost certainly isn’t going to be duplicated in future years. CEO Mark Zuckerberg has noted that his company will have “around 600,000 H100 equivalents of compute if you include other GPUs” by the end of 2024. Presumably, Meta’s chief is intimating the use of Meta’s in-house-developed AI chips along with Nvidia’s H100 GPUs.
The point being that Nvidia’s top customers are either moving away from its GPU technology, or are highly unlikely to sustain their existing order activity beyond the current year.
I have no idea if those numbers have changed in recent weeks, but they definitely seem worth watching.
I guess that’s what I’ve tried to do. I have noticed that not only revenue growth rate, but revenue growth in actual dollars, has actually been declining sequentially.
I’m not sure where all this leaves us…I just find it interesting to ask if sequential double digit revenue growth going forward will be enough. It wasn’t for Zoom, and it only stayed in double digits for a couple quarters after it started declining, but as I’ve said, I concede that Zoom isn’t the best analog.
Bear