Amit Kukreja
NVIDIA ALL TIME HIGHS, CHINA IS BUYING SOYBEANS, FOMC MEETING, BIG TECH EARNINGS | MARKET OPEN
10/29/2025, 12:29:55 PM
Economic Summary
- Widespread GPU shortages (driven largely by demand for NVIDIA NVDA chips) are preventing major cloud providers from satisfying compute demand, constraining short-term revenue growth across cloud businesses (Microsoft MSFT, Amazon AMZN).
- AWS reportedly has roughly a 25% 'burning backlog' on GPUs, meaning unmet customer requests and missed revenue; this backlog stresses capex budgets and forces cost reductions.
- Because AWS contributes outsized margins to Amazon AMZN, an inability to procure more chips suppresses AWS growth (recently ~18% YoY) and pressures management to cut fixed costs to meet investor margin expectations.
Bullish
- NVIDIA enjoys very strong demand for GPUs powering AI workloads.
- Google's TPU availability gives it an edge over GPU-constrained rivals.
- AWS has historically high-margin AWS business that can rebound if supply improves.
Bearish
- GPU shortages limit cloud providers' ability to fulfill customer demand, constraining revenue.
- AWS's ~25% GPU backlog is causing missed revenue and capex overspending.
- High GPU costs are forcing companies (e.g., AMZN) to cut fixed costs and lay off workers.
Bullish tickers
NVDAGOOGLAMZN
Bearish tickers
AMZNMSFT
NVDA
Bullish
Extremely strong demand for GPUs powering AI workloads; sells chips to virtually all major cloud providers.
Bearish
Supply constraints and market concentration could raise regulatory or competitive scrutiny, but transcript focuses on demand-driven shortages rather than NVDA-specific downsides.
AMZN
Bullish
AWS remains a high-margin business whose recovery would meaningfully improve Amazon's overall profitability if chip supply normalizes.
Bearish
GPU cost and supply constraints are hitting AWS capex, producing a ~25% GPU backlog, missed revenue, and layoffs to protect margins.
MSFT
Bullish
Large cloud footprint implies strong underlying demand for compute, though supply-constrained in short term.
Bearish
Microsoft is unable to secure enough GPUs to meet cloud compute demand, limiting revenue growth.
GOOGL
Bullish
Has TPU infrastructure advantage, putting it in a relatively easier position versus GPU-constrained competitors.
Bearish
Also affected by general GPU demand pressures, though less dependent due to alternative hardware.