Nvidia Reports Earnings This Month, and I'm Not Buying Shares. 1 AI Stock to Buy Now Instead.

Nvidia reported fiscal Q4 revenue of $68.1 billion, up 73% year over year, and guided fiscal Q1 revenue to about $78 billion, implying roughly 75% growth. However, the article argues that Broadcom-led custom chip programs from major customers such as Google, Anthropic, OpenAI, and Meta are creating credible alternatives to Nvidia, potentially limiting pricing power. Amazon is highlighted as a stronger AI-chip play, with its custom silicon business at a $20 billion annual run rate and growing triple digits year over year.

Analysis

The key market implication is not that Nvidia’s demand is weakening today, but that its future unit economics are moving from monopoly-like to oligopoly-like faster than the stock multiple assumes. The first-order beneficiary of that shift is Broadcom, because custom silicon wins are sticky, high-margin, and create a recurring design-socket model that can compound even if the broader AI capex cycle moderates. The second-order effect is a slower-than-expected mix shift in hyperscaler spend away from merchant GPUs toward in-house or semi-custom ASICs, which should gradually pressure Nvidia’s pricing power before it shows up in absolute unit volumes.

Amazon looks more attractive than a simple “own the cloud leader” trade because its chip business turns internal capex into a strategic moat: every incremental Trainium deployment both lowers AWS customer acquisition cost and raises switching costs for large model developers. That creates a flywheel Broadcom does not fully capture, since AWS can subsidize silicon adoption through cloud commitments. The market is likely underestimating how much of Amazon’s AI capex is economically pre-committed over a multi-year horizon, which reduces the probability that near-term spending becomes stranded if the AI cycle slows.

The contrarian risk on Nvidia is timing: this is not a collapse story, it is a marginal repricing story, and those often hurt most when growth remains strong but decelerates from extraordinary to merely excellent. If the next 1-2 quarters show any evidence that Blackwell demand is being satisfied by customer-specific alternatives, the multiple can compress quickly even without an earnings miss. Conversely, a sharp upside surprise in networking or gross margin would refute the near-term substitution thesis, but the more durable downside to Nvidia comes over 6-18 months as custom silicon deployments scale into production capacity rather than prototypes.

Key Decisions for Investors

• Go long AMZN vs NVDA on a 6-12 month horizon: Amazon has a better balance of durable cloud cash flows and internal silicon monetization, while Nvidia’s valuation is more exposed to any margin reset. Use a 1:1 notional pair; take profits if NVDA re-rates above 50x forward earnings or if AMZN capex guidance inflects lower than expected.
• Initiate a tactical long AVGO position into the next 2 quarters: Broadcom is the cleanest public-market proxy for custom AI design wins, with the best asymmetry if hyperscaler ASIC adoption continues. Risk/reward is favorable for 15-20% upside if the market starts capitalizing design-win annuity streams more explicitly.
• Consider a short-dated NVDA put spread into the earnings event: this is not a directional collapse trade, but a hedge against multiple compression if guidance is merely in line and commentary acknowledges customer self-supply. Favor 1-2 month tenor to capture post-print de-rating risk; cap risk with a defined-loss spread.
• Long GOOGL against NVDA as a medium-term substitute-vs-supplier pair: Alphabet benefits twice, as TPU utilization rises and its AI capex becomes more self-funded through cloud demand. The trade works best if investors start rewarding platform economics over merchant silicon margins.
• Avoid chasing NVDA strength above recent highs unless gross margin expansion accompanies the print: the market is paying for flawless execution plus sustained scarcity, and any sign of normalization in lead times or customer diversification likely creates a sharper drawdown than consensus expects.