Nvidia’s $4 Trillion Warning Sign No One on Wall Street Sees Coming

Wall Street analysts are hailing Nvidia (NVDA) as the unstoppable king of AI stocks. But one contrarian investor sees it as potentially the biggest trap in modern stock market history.

Just weeks ago, Nvidia briefly became the world’s first $4 trillion company. The AI chip giant has been the undisputed leader of artificial intelligence stocks, delivering astronomical returns to shareholders who got in early.

But according to Futurist Eric Fry, a global macro analyst with over 30 years of experience, Nvidia’s reign may be coming to a spectacular end.

“Everyone thinks Nvidia is untouchable,” says Fry, who has famously been making uncanny same-day “Sell This, Buy That” calls for three decades. “But I’ve seen this story before. And often, it doesn’t end well for the supposed ‘winner.'”

The Numbers Don’t Lie

Fry points to a troubling trend that most investors are ignoring: Nvidia’s profit margins are collapsing.

In other words, the company used to keep 78 cents of profit on every dollar of sales. Now it’s down to 71 cents and falling fast.

“That’s what happens when everyone and their brother starts making competing chips,” Fry explains.

And the competition is coming directly from its own customers. Amazon, Google, Microsoft and Meta are all building their own AI chips in a move that could potentially cut Nvidia out entirely.

Just four companies make up 46% of Nvidia’s entire business. If each of them successfully develops alternatives, Nvidia could face a revenue cliff that it may never recover from.

History Repeating

Fry draws parallels to Intel’s situation when Apple decided to create its own custom chips.

“Apple went from customer to competitor, and Intel stock tanked 71%,” he notes. “The crash was so surprising because it came after Intel delivered an 11,600% gain to investors.”

The pattern is eerily similar to what’s happening with Nvidia today.

The Suppliers Are Winning

While Nvidia faces mounting challenges, a different category of AI stocks is quietly dominating the market.

Vertiv Holdings, a data center cooling company, has grown 1,407% over the past 36 months, far outpacing Nvidia’s growth.

Modine Manufacturing blew Nvidia’s gains out of the water by more than double over the same time period – earning investors 10 times their money.

“Suppliers to data centers appear to be overtaking Nvidia’s growth,” Fry observes. “Smart money is already moving.”

The One Component Nobody Talks About

Fry has identified what he believes could be the next big winner in the AI space – and it’s not what most people expect.

“While everyone obsesses over AI chips, they’re missing the ONE component that makes everything work,” he says. “Without it, even the most powerful AI chip is just expensive silicon.”

New AI data centers need 10 times more of this component than regular data centers. We’re talking about enough hardware to circle the globe 8 times in a single facility.

And unlike Nvidia’s customers turning into competitors, the leading supplier of this hardware has virtually ZERO competition from customers.

“AI hyperscalers are fighting to get MORE hardware from this company, not replace them,” Fry explains.

This publicly-traded company’s CEO recently revealed that their production is tripling every month to meet the outsized demand.

Get the Full Story

Eric Fry has compiled his complete analysis, including the names and ticker symbols of 7 “sell” and “buy” stock ideas, in a streaming online video.

Watch Eric Fry’s latest “Sell This, Buy That” analysis here

“I’ve been doing this for 30 years,” Fry concludes. “When I see this level of complacency around a ‘sure thing’ stock, that’s usually when the biggest surprises happen. Don’t say I didn’t warn you.”

Get Fry’s 7 stock recommendations – plus details on his Nvidia alternative – for free here. 

About

With Fry’s Investment Report, Eric Fry’s goal is to track the world’s biggest macroeconomic and geopolitical events – and help investors make big gains from those emerging opportunities. Eric is a 30-year international finance expert, former hedge fund manager, and InvestorPlace’s resident expert on global investment trends. He founded his own investment management firm and served as a partner several others. In 2016, he won the Portfolios With Purpose stock-picking contest – Wall Street’s most prestigious investment competition – making him America’s Top Trader.