Nvidia's blowout (NVDA) earnings have become an earthquake sending shockwaves through tech.
The company's revenue came in at $13.51 billion, an astonishing 101% jump year over year, setting Wall Street abuzz.
And Nvidia's earnings are now not only about Nvidia: The tech company is now a bellwether for the AI boom, and an ecosystem has emerged in which a win for Nvidia can come in tandem with wins for some additional companies — as well as questions for others.
Here's who's aligned with Nvidia's rise right now — and who isn't.
The winners
Much of the so-called Magnificent Seven are aligning with Nvidia's rise.
"Several companies are going to benefit from this. Big Tech, like Alphabet, Amazon, Apple, Meta, and Microsoft; so are all the banks and financial institutions that invested directly; and companies using AI, like IBM and Salesforce," Anat Alon-Beck, a professor at Case Western Reserve University School of Law, told Yahoo Finance.
Some of the big names that experts say are primed to win with Nvidia include Apple (AAPL), Amazon (AMZN), Meta (META), Microsoft (MSFT), Salesforce (CRM), and IBM (IBM).
Amazon and Microsoft are especially key as they have existing cloud partnerships with Nvidia, while Meta has an existing consumer-focused partnership with the chipmaker. All three companies got shoutouts towards the top of Nvidia's Wednesday earnings call.
Two under-the-radar winners who also emerged in Nvidia's earnings call: Snowflake (SNOW) and VMware (VMW), both of which have relatively new enterprise partnerships.
A notable post-Nvidia spike was Alphabet's (GOOG, GOOGL): Shares rose as much as 3% after Nvidia's report amid the company's stock hitting a high unseen since April 2022 earlier in the day. Nvidia and Google Cloud announced a partnership emphasizing AI hardware in March.
Ultimately, there's no bigger winner out of Nvidia earnings than Nvidia itself — and the AI boom that's propelled the chipmaker to new heights. Though the AI hype can't last forever, with this latest earnings report, Nvidia and the hype have shown some key resilience.
The losers and the question marks
Nvidia's competitors are clearly in the crosshairs: Qualcomm (QCOM), Intel (INTC), and AMD (AMD) all saw their shares in the red on Thursday. AMD's seeing the steepest decline, falling as much as 8%.
However, it's not curtains for non-Nvidia chipmakers, either — this is a big market and it's still early days, said Alon-Beck.
"I know that they definitely compete with each other, but that Nvidia seems to be the one that won Wall Street’s affection," Alon-Beck said. "They are all important, especially with what’s happening in the international arena and the tensions with China. All of them — Intel, Nvidia, and Qualcomm — are in talks with US officials about the China market. I don’t have a crystal ball but would think that perhaps it’s good for all of them if Nvidia continues to succeed. Yes, competition is fierce and they have different strengths and weaknesses, but there is room for all in our current market."
Critical infrastructure for the AI boom is also shifting, and that could have ramifications down the line. It all looks good mid-hype cycle, but companies are going to have to work to meet the demand for AI by revamping their existing systems over time. Specifically, data centers — at the center of operations for essentially all tech companies — are in flux as the demand for Nvidia chips is re-forming how data centers will operate and grow from here.
"A company may have an allocation of [AI chips], but the next critical question is whether they have the data center capacity to make it usable," Tom Traugott, SVP of strategy at EdgeCore Digital Infrastructure, told Yahoo Finance. "AI is pushing data center buildings to be larger and denser than ever before."
Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks and on LinkedIn.
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