By Insider Monkey Team
Publication Date: 2026-10-17 17:35:00
Chip stocks had a rough week, and the trouble didn’t start at a chipmaker. A spike in the bond yields of CoreWeave, a cloud provider that rents out AI computing power, revived worries about debt-heavy AI customers and dragged semiconductor shares lower, according to Yahoo Finance. Nvidia (NASDAQ:NVDA), both an investor in CoreWeave and its chip supplier, slipped with the group.
Nvidia designs the processors and networking gear that train and run AI models, and sells them as complete data center systems to cloud giants, AI labs, and specialists like CoreWeave. Gamers know it for its graphics cards, but data centers now bring in the vast majority of its revenue.
So the selloff raised a sharp question: is Nvidia’s growth only as sturdy as the balance sheets of the companies buying its chips? The answer depends less on one cloud provider than on who else is paying.
A Supplier With Software-Like Margins
Whatever its customers are doing, Nvidia itself is enormously profitable. Over the past 12 months, it earned $192.88 billion in net income and kept about 65% of its sales as operating profit. Those margins come from pricing power: buyers pay up because Nvidia sells the chips, the networking, and the software developers already build on.
That edge has compounded for years, with revenue growing about 66.9% a year over the past five years. AI spending has been the common thread for the wider chip group covered in 12 Best…
