The AI feast is still continuing, but in the era of heterogeneous computing power, NVIDIA Corporation's "absolute dominance" is fading.

In this round of earnings season in the US stock market, there have been frequent positive news for the artificial intelligence (AI) track, but investors have not been increasing their holdings in NVIDIA Corporation (NVDA.US) according to the trend, instead they have been selling off its stock in large quantities. NVIDIA Corporation, which dominates the AI chip market with GPUs, reached an all-time high closing price on April 27th, but its stock price fell by 9% over six consecutive trading days. In the same period, the Philadelphia Semiconductor Index rose over 5%, with NVIDIA Corporation ranking at the bottom of the index components. The reason behind this is that despite the continuous increase in investment in computing power equipment by tech giants, NVIDIA Corporation's absolute dominant position in the AI processor market is facing a double impact from other chip manufacturers and its major customers, putting its industry leadership at risk. Last week, Alphabet Inc. Class C (GOOGL.US) announced that they would open up their Tensor Processing Units (TPUs) to certain specific customers for use in their own data centers. Amazon.com, Inc.'s custom AI chip Trainium series has locked in orders worth over $22.5 billion in revenue, and recently secured commitments for purchases worth billions of dollars from Meta (META.US), which is also in the process of developing its own AI chips and preparing for deployment. At the same time, Intel Corporation (INTC.US) is benefiting from the growth in the AI industry, and Qualcomm (QCOM.US) is steadily making breakthroughs in the data center chip market. Bill Stone, Chief Investment Officer of Glenview Trust Company, said, "When a company almost monopolizes 100% of the market share, the only possibility going forward is a decline. These companies entering the market now have the strength to become strong competitors to NVIDIA Corporation." At present, there is no clear sign that NVIDIA Corporation's market share is being significantly eroded by its competitors. According to research data from Bloomberg Intelligence, NVIDIA Corporation's market share in the AI accelerator market is expected to remain at 86% in 2025, the same as in 2024. However, concerns about competition have raised doubts about its long-term growth prospects, making investments in other chip targets relatively more attractive. NVIDIA Corporation has only seen a 5% increase in its stock price this year, keeping pace with the S&P 500 index, far behind other companies in the semiconductor industry. The Philadelphia Semiconductor Index has surged by 55% this year, with NVIDIA Corporation ranking at the bottom among the 30 components in the index in 2026. Stone, who oversees around $18 billion in assets, admitted, "Once we notice marginal loss in NVIDIA Corporation's business, competitors gradually eroding their market share and pricing power, the company's profit growth momentum will be under pressure, and the stock price is likely to weaken." A spokesperson for NVIDIA Corporation declined to comment citing the quiet period around their financial reports. The global demand for AI computing equipment has once propelled NVIDIA Corporation to the top of the world's highest market value companies, with a market value reaching $4.8 trillion. However, its leading position is now on shaky ground, with Alphabet Inc. Class C's market value rapidly approaching. Over the past year, driven by the popularity of its Gemini large models, cloud computing, and self-developed chip businesses, Alphabet Inc. Class C's market value has skyrocketed by over $2.5 trillion, reaching approximately $4.7 trillion in market value at the close on Tuesday. Of course, NVIDIA Corporation's revenue growth remains robust. The company's revenue for this fiscal year (ending January next year) is expected to increase by 70%, surpassing other tech giants, and the growth rate is also higher than the 65% in the previous fiscal year. However, the market expects its growth rate for the fiscal year 2028 to slow down to 32% and further decline in the following two years. The company is scheduled to release its first-quarter financial report on May 20th. Investors who are bullish on NVIDIA Corporation believe that the demand for AI processors remains strong, and the industry growth is sufficient to support the performance of various companies. The four major tech giants, Alphabet Inc. Class C, Amazon.com, Inc., Meta, and Microsoft Corporation (MSFT.US), have a combined capital expenditure plan of $725 billion this year, with the scale of investment expected to increase significantly by 2027. According to compiled supply chain data, these four companies contribute approximately 45% of NVIDIA Corporation's revenue. However, Bank of America Corp analyst Vivek Arya pointed out in a research report on April 29th that the above-mentioned tech giants are now generally implementing heterogeneous computing deployments using both NVIDIA Corporation chips and their own custom chips. It is worth noting that Alphabet Inc. Class C's TPU is considered one of the best alternatives to NVIDIA Corporation's products. This chip, designed for accelerating machine learning computing power, is even called Alphabet Inc. Class C's "ace in the hole". The market has also recognized the growth potential of this business. Citizens analyst Andrew Boone estimates that Alphabet Inc. Class C's TPU-related infrastructure revenue will reach $3 billion in 2026 and is expected to soar to $25 billion in 2027. Clayton Allison, a portfolio manager at Prime Capital Financial managing approximately $40 billion in assets, said, "I wouldn't say that NVIDIA Corporation's competitive position is under major threat from these new chips, but the market's response to NVIDIA Corporation reflects that people are starting to question its market share, competitive moat, and profit margins." On Tuesday, AMD (AMD.US) stated that with the continuous increase in the weight of general-purpose CPUs in AI service operations, demand in the related market is expected to see a significant increase. Despite the strong undercurrents of competition, Wall Street analysts still favor NVIDIA Corporation. Among the 80 analysts tracked by institutions, only 3 have given a "hold" rating, while 1 has recommended a "sell". Over the past quarter, market expectations for NVIDIA Corporation's earnings for the fiscal year 2027 have been raised by 11%, along with an increase in revenue expectations; estimates for the fiscal year 2028 performance have been revised upwards even more, indicating that institutions are still optimistic about its long-term development path. Stone of Glenview commented, "NVIDIA Corporation was once an undisputed solid choice in the AI field, but now the aura is fading; while Alphabet Inc. Class C has become the market's new favorite in AI. While these new chips may not deal a fatal blow to NVIDIA Corporation, they will hinder its return to growth peak. I won't reduce my holdings, but I also won't increase my position on the dips."