Nvidia will be a major beneficiary of the growing inference pie: Big Technology's Alex Kantrowitz

Summary

• Nvidia's business is in "really good shape" and is positioned to capture the "lion's share" of the massive ~$700B big tech AI capex expected this year, which could reach ~$1T by 2027.
• Despite this, there is a market perception of disappointment around Nvidia's forecast to capture ~$1T from two products over two years, given the enormous total spending pool.
• The AI investment landscape is described as dynamic, volatile, and changing rapidly, requiring investors to "hold on to their seats."
• A key transition is underway from the training phase (where Nvidia dominated) to the inference phase, where Nvidia will face "much more competition."
• There is fundamental uncertainty over which layer of the AI stack (chip makers, hyperscalers, application builders, model builders) will capture the most economic value, with arguments that any could capitalize the most or get nothing.
• The "middle layer" software and data management companies (like Snowflake, Datadog) are seen as "very important" and not replaceable soon, as quality data remains critical even in an advanced AI-driven computing environment.