Rebel Finance Podcast-Episode 5 is out, we talk to David Blackmon about all things energy

Market Recap

So I was a bit surprised the market reacted so positively to Powell, didn’t hear anything myself to warrant it. Turns out investors seemed to have agreed, yesterday turned green to red, to green, and back to red. This morning so far is red. Massive options exercise today which could also muck things up. I also noted that Thursday could have been “a” low, or the chart of the SPY could be forming a bear flag. Watch $549.68 and the 200 day for clues…..

This continues to interest me…..

Germany Set for Trillion-Euro Defense and Infrastructure Splurge-WSJ

You know how I feel about the European defense stock trade but I missed Germany itself. Waiting for EWG to curl into some support perhaps….

This happened to quantum stocks….

Nvidia’s Quantum Computing Event Was a Dud. Why D-Wave Stock and Others Are Falling.-Barron’s

On the positive side….

I got puts on QUBT, but they all pretty much look the same…..

I like to play this area long/short. If I get lucky enough to have it bounce at the 200 day again then I would flip long.

This is interesting. We talked about the turbines in yesterday’s Rebel Finance Podcast. David thinks GEV is not scaling up as fast as they could because they believe the future belongs much more to renewables….

Nvidia’s Next-Gen Chips Will Guzzle Electricity. Will the U.S. Have Enough Power?-Barron’s

Jeremy also mentioned that OKLO looks like it was setting up….

Oklo Signs Nuclear-Plant Agreement. Why Its CEO Sees a ‘Huge Amount of Potential.’-Barron’s

Nvidia’s AI Dominance: Will the Empire Last?

How the AI Boom Created the Most Valuable Monopolies in History-Bloomberg

Since the explosive popularity of ChatGPT, Nvidia has emerged as the definitive power behind artificial intelligence, fueling an unprecedented boom. Today, Nvidia controls roughly 90% of the AI chip market, and its GPUs are the essential engine running everything from chatbots to autonomous vehicles. But investors are asking: Can Nvidia sustain this remarkable dominance?

Short-Term: Nvidia’s Near-Term Reign Uncontested

Right now, Nvidia appears untouchable. Demand for its flagship AI GPUs, especially the H100 and Blackwell GPUs, has surged dramatically—selling millions of units at premium prices. Nvidia’s secret sauce, the CUDA software platform, has over four million developers locked in, creating a powerful moat that competitors can’t quickly match.

This near-monopoly is reinforced by a unique alliance of strategic partners—TSMC, which manufactures Nvidia’s chips; SK Hynix, providing essential high-bandwidth memory; and ASML, the only supplier of the sophisticated machinery required for advanced chip fabrication. Tight supply chains have only strengthened Nvidia’s pricing power.

Short-term winners: Nvidia, TSMC, SK Hynix, ASML, Arista Networks
Short-term losers: Intel’s traditional server CPUs, companies overly reliant on older CPU-centric models

Medium-Term: Rising Competition and Diversification

Looking 2-3 years ahead, we anticipate increasing competition. AMD is rapidly advancing with its MI300 GPUs, which promise significant cost and efficiency advantages. Major cloud companies—Google, Amazon, and Microsoft—are also aggressively developing their custom AI chips. While these alternatives won’t entirely replace Nvidia, they’ll provide much-needed competition, potentially moderating Nvidia’s pricing power and market share.

However, Nvidia isn't standing still—it plans to introduce new architectures like the Blackwell GPU, further solidifying its technological edge. The company is also expanding vertically with the Grace CPU and networking technology from Mellanox, positioning itself as a one-stop solution provider.

Regulatory challenges might also intensify. The U.S. and China are both scrutinizing Nvidia’s market control. While drastic measures like forced breakups seem unlikely, regulators could impose constraints to ensure fair competition.

Medium-term winners: AMD, Broadcom, cloud companies with in-house chip solutions (Amazon, Google, Microsoft), semiconductor ecosystem players (ASML, TSMC, SK Hynix)
Medium-term caution: Nvidia (maintaining growth but facing increased competition)

Long-Term: A More Competitive and Diversified AI Landscape

Over five or more years, expect a more balanced landscape. Nvidia will remain a key player, but its market share may normalize as competition strengthens. Advanced chip packaging, new AI-specific processors, and breakthroughs in alternative technologies (FPGA, neuromorphic, and analog chips) will gradually diversify the market.

Long-term, we might also see widespread adoption of open standards and software solutions that allow developers greater flexibility across chip providers, potentially eroding Nvidia’s current software moat.

Geopolitics will continue to play a significant role. Persistent U.S.-China tech tensions might result in parallel AI ecosystems, creating opportunities for Chinese domestic chipmakers and reducing Nvidia’s global market access.

Regulatory concerns could intensify, with governments treating AI chips as strategic resources, possibly leading to tighter controls or mandates for industry collaboration.

Long-term investment themes: Nvidia (transitioning into a stable, high-value platform), AMD (rising competitor), semiconductor equipment makers (ASML, Applied Materials), memory providers (Micron, Samsung), and companies focused on efficiency and sustainability in AI computing.

Strategic Investor Takeaway:

Nvidia’s short-term dominance in AI chips is undeniable, driven by superior technology, strong partnerships, and critical software leadership. However, over the medium to long term, competition and innovation will inevitably reshape the market. Investors should balance their exposure by maintaining stakes in Nvidia while also diversifying into emerging challengers, critical supply chain partners, and AI ecosystem players.

The AI revolution will continue to drive substantial growth and innovation, and while Nvidia’s current empire is strong, history suggests that no monopoly lasts forever. Smart investors will ride the Nvidia wave while staying vigilant for the next disruptive opportunities.

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