So Amazon’s CEO Andy Jassy just dropped some numbers that should make Nvidia investors do a little happy dance. During Amazon’s Q2 earnings call, Jassy casually mentioned that AWS is pulling in a $123 billion revenue run rate – which is roughly double Microsoft Azure’s $86 billion. Cool flex, Andy.
But here’s the kicker: while he’s bragging about AWS dominance, he’s basically painting a roadmap for why Nvidia is about to print money for the next decade.
The Cloud Migration That Changes Everything
Jassy dropped this gem: “85% to 90% of worldwide IT spend is still on-premises versus in the cloud. In the next 10 to 15 years, that equation is going to flip.” Translation? We’re still in the early innings of the biggest tech migration in history, and it’s about to get turbocharged by AI.
Think about it – if companies are just now starting to move their stuff to the cloud, and AI is making that migration even more urgent, someone’s got to power all those data centers. Spoiler alert: it’s Nvidia.
The Nvidia-Amazon Love Story
Amazon and Nvidia have been buddies since 2010, but their relationship is getting spicier. AWS was the first major cloud provider to offer Nvidia’s latest Blackwell GPU platform – basically the Ferrari of AI chips. These things are twice as fast at training AI models and five times faster at inference compared to older chips.
Sure, Amazon is trying to build their own chips (Trainium and Inferentia) to save some cash. But even Amazon executives admit Nvidia’s chips will be “a mainstay for the foreseeable future, likely over the next five to 10 years.” When your biggest customer-slash-competitor says you’re irreplaceable, that’s a pretty good sign.
It’s Not Just Amazon
The beautiful thing about Nvidia’s position is they’re not putting all their eggs in one basket. Microsoft is reportedly deploying over 1.3 million Nvidia GPUs across Azure data centers. Meta is planning to scale to 350,000 H100 GPUs by 2026. Even Google Cloud and Oracle are loading up on Nvidia silicon.
Morgan Stanley thinks Meta alone could generate $250 billion in revenue for Nvidia. That’s not a typo – billion with a B.
The Bottom Line
Yeah, Nvidia’s stock price looks scary at first glance – we’re talking about a company worth over $4 trillion. But when the CEO of the world’s biggest cloud provider is essentially telling you that the cloud revolution is just getting started, and his company (along with everyone else) needs Nvidia’s chips to make it happen, maybe that valuation isn’t so crazy after all.
The global cloud computing market is projected to grow from $626 billion to over $1.4 trillion by 2030. Nvidia controls over 90% of the AI chip market. Do the math.
Sometimes the obvious play is the right play. And right now, that play rhymes with “Nvidia.”