Big Tech's spending drove Nvidia's rise
Nvidia's (NVDA) rise has been fueled by Big Tech’s spending on its AI chips.
Its fellow members of the so-called Magnificent Seven group of Big Tech stocks are also its biggest customers. Microsoft (MSFT) is the largest driver of Nvidia’s revenue, followed by Meta (META), Amazon (AMZN), and Google parent Alphabet (GOOG), according to Bloomberg estimates.
Tesla (TSLA) is Nvidia’s 15th largest customer.
As of Nvidia’s 2025 fiscal fourth quarter (the three months ending on Jan. 26 of this year), Bloomberg estimates that Microsoft spends roughly 47% of its capital expenditures directly on Nvidia’s chips and accounts for nearly 19% of Nvidia’s revenue on an annualized basis. Bloomberg compiles its data from publicly available documents, such as company financial reports and presentations and news stories, and adjusts its numbers on an annualized basis for comparison.
Meanwhile, 25% of Meta's capital expenditures go to Nvidia and the company accounts for just over 9% of Nvidia’s annual revenue.
And that’s all direct spending on Nvidia. Big Tech also props up Nvidia indirectly. For example, Microsoft spends big sums renting data center capacity from cloud provider CoreWeave (CRWV), which spends billions of dollars on Nvidia’s chips for those data centers. Microsoft accounted for 72% of CoreWeave’s revenue in the company’s most recent fiscal quarter.
Meta, Microsoft, Amazon, and Google are set to spend north of $330 billion, cumulatively, this year, fueled by their spending on AI investments.
“We believe NVIDIA is reliant on a handful of large technology companies for about half their revenue,” DA Davidson analyst Gil Luria told Yahoo Finance in an email. “That portion of revenue has gone up dramatically the last couple of years but appears to be moderating its growth.”
Just three years ago, Microsoft spent less than 1% of its capital expenditures on Nvidia chips and similarly accounted for less than 1% of Nvidia’s revenue on an annualized basis, according to Bloomberg data based on Nvidia’s 2022 fourth quarter earnings.
“This spend may further slow down as these customers increasingly use the chips they developed in-house,” Luria added. “While NVIDIA chips have a very large advantage on AI pre-training, the cost performance of the custom chips is much more competitive.”
Microsoft, Meta, Google, and Amazon have all developed their own custom AI chips tailored to their specific AI workloads, making those chips more efficient for each company’s needs.
On top of that, rival chipmakers such as Broadcom (AVGO) are developing custom AI chips for their customers, whereas Nvidia’s GPUs (graphics processing units) are for more general-purpose AI computing.
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