The Cloud Capex Trap: Is NVIDIA Losing Control of Its Own Growth Trajectory?

TradingKey - Nvidia (NVDA) delivered better-than-expected growth in its Q2 FY2026 earnings, but a slowdown in its key growth engine — the data center segment — has sparked a new concern: While the deceleration was expected, amid rising fears of an AI bubble, an increasing number of Wall Street analysts are warning that a potential slowdown in AI capital expenditures by tech giants could further weaken Nvidia’s growth momentum.

Amazon, Google, and Microsoft are the primary customers for Nvidia’s data center business. Nvidia CFO Colette Kress revealed that large cloud service providers account for approximately 50% of data center revenue.

These cloud giants purchase Nvidia’s leading AI chips and servers to power their AI software development. According to estimates:

• 46.96% of Microsoft’s capital expenditures go toward Nvidia chips
• 25.44% for Meta
• 15.44% for Google
• At least 10% for Amazon

In terms of contribution to Nvidia’s total revenue:

• Microsoft: 18.87%
• Meta: 9.33%
• Amazon: 7.52%
• Google: 5.6%

As long as AI demand continues to grow, this high-quality customer base provides a powerful engine for Nvidia’s expansion. However, as concerns grow over a potential slowdown in AI spending, this concentration could quickly turn from a strength into a strategic vulnerability.

Stifel analysts said:

“Nvidia's biggest risk is a pause in capital expenditures from tech giants, which is inevitable but not something that we are thinking will happen through 2026 based on various supply chain checks."

William Blair analysts echoed similar concerns:

“Any slowdown in AI spending would pose a major risk to Nvidia, but most indicators point to continued strong growth in AI investments over the next couple of years."

Following the release of a recent MIT report titled “The GenAI Divide:State of AI in Business 2025,” which revealed that 95% of AI investments have generated zero financial return, fears of an AI bubble have begun spreading across capital markets.

HSBC noted that in the near term, there is limited room for Nvidia to further raise earnings expectations as a catalyst for its stock — unless it can provide clearer visibility into cloud service providers’ (CSPs) capex plans.

Nvidia CEO Jensen Huang remains optimistic, projecting that AI infrastructure spending could reach $3–4 trillion by 2030. 

But HSBC cautioned that since Q2 FY2025, Nvidia’s performance has not shown significant upside surprises or acceleration in growth.