[ING: Nvidia's Profit Margins Face Threat from Clients' Self-Developed Chips]

Published: Jul 8, 2026 08:57

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Jan Frederik Slijkerman of ING wrote in a report that with tech giants developing their own chips, there is uncertainty over Nvidia's ability to sustain its profit margins. He pointed out that major clients such as Microsoft, Alphabet, and Amazon are developing their own custom chips to help control AI infrastructure costs (capital expenditure efficiency). He said that, as a result, Nvidia's pricing power could face stiffer competition than in recent years, which will make it harder to maintain its currently exceptionally high margins over the long term, even as the company expands into new business lines.

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