Gladiator 4 – Nvidia v Microsoft

The smiley buy signals on this chart relate to buy signals following the bunching of the moving averages. Such signals have worked well over the last decade as Nvidia has remained in a dramatic long-term uptrend. Coppock is yet to be in buy signal territory, but is not far away.

There are two positive developments on the fundamental front. Trump’s China tariffs are as bad as they could be for Nvidia, so there is room for improvement if the administration accepts the company’s argument that trying to stop China’s technological progress is a Canute-style exercise. It is much better to open the world’s markets to Nvidia to make that all-American business as strong as possible.

Secondly, demand is on fire.

Nvidia, the dominant U.S. chipmaker for artificial intelligence (AI), said demand has “exploded” due to increasing use of inference models, and highlighted growing investment in sovereign AI and global AI factories. Currently, 100 AI factories are under construction worldwide—including major investments in Taiwan. However, challenges such as power supply constraints and the pace of enterprise AI adoption remain. Ian Buck, Vice President of Nvidia’s Accelerated Computing division, stated at the BofA Securities Global Technology Conference on June 4 that AI inference demand has surged due to the rising use of inference models. “Inference demand has absolutely exploded,” he said, adding that “inference adds tremendous value.” (Note: Inference is the process through which an AI model generates responses.) Advanced models from DeepSeek, OpenAI, Anthropic, and xAI are all equipped with inference capabilities, allowing for multi-stage thought computation that enhances response quality through deeper reasoning. According to Nvidia, inference consumes up to 100 times more compute resources than earlier AI models, thereby driving massive demand for AI chips.

In his conversation with BofA tech analyst Vivek Arya, Buck emphasized that building robust platforms has driven innovation in the inference market, and the focus remains on scalable AI factories and training clusters. With the continuous rise in AI model performance, models with 100 billion parameters are now the norm, and trillion-parameter models are becoming more common. Nvidia’s strategy, Buck explained, centers on AI factories optimized for inference and large-scale training clusters. The company also offers supporting software like the NeMoTron model and Lepton, which are designed for data center deployment. When asked about the business opportunity in AI factories, Buck said that countries around the world are increasing investment in AI tailored to their specific industries and datasets. For example, Taiwan is building an AI factory that may use 10,000 Blackwell GPUs, which he described as “built for Taiwan’s industries and owned by Taiwan.” He also noted that Japan is building AI factories using domestic data. Globally, around 100 AI factories are currently being planned and assembled. Buck added that Nvidia may reveal more information about AI factories and sovereign AI at next week’s GTC developer conference in Paris (June 11–12) and the International Supercomputing Conference (ISC) in Berlin (June 10–13). He hinted that key growth challenges going forward will likely include power supply issues and the speed at which enterprises adopt AI.

Jukanlosreve, 5 June 2025

Nvidia and Microsoft are battling to be the world’s largest company by market value. Both have great charts and exciting fundamentals.

Microsoft has a close partnership with OpenAI.

We are thrilled to continue our strategic partnership with OpenAI and to partner on Stargate. Today’s announcement is complementary to what our two companies have been working on together since 2019.

The key elements of our partnership remain in place for the duration of our contract through 2030, with our access to OpenAI’s IP, our revenue sharing arrangements and our exclusivity on OpenAI’s APIs all continuing forward – specifically:

Microsoft has rights to OpenAI IP (inclusive of model and infrastructure) for use within our products like Copilot. This means our customers have access to the best model for their needs.

The OpenAI API is exclusive to Azure, runs on Azure and is also available through the Azure OpenAI Service. This agreement means customers benefit from having access to leading models on Microsoft platforms and direct from OpenAI.

Microsoft and OpenAI have revenue sharing agreements that flow both ways, ensuring that both companies benefit from increased use of new and existing models.

Microsoft remains a major investor in OpenAI, providing funding and capacity to support their advancements and, in turn, benefiting from their growth in valuation.

In addition to this, OpenAI recently made a new, large Azure commitment that will continue to support all OpenAI products as well as training. This new agreement also includes changes to the exclusivity on new capacity, moving to a model where Microsoft has a right of first refusal (ROFR). To further support OpenAI, Microsoft has approved OpenAI’s ability to build additional capacity, primarily for research and training of models.

We thank OpenAI for their continued partnership and look forward to what’s to come.

Microsoft

Microsoft owns 49% of OpenAI, acquired in return for a $13bn investment in the business. This stake could become immensely valuable. The latest funding round valued OpenAI at $300bn, up 100% in six months. The launch of ChatGBT triggered the explosion of interest in Generative AI, or whatever the latest iteration of AI is called, so most likely, OpenAI will be found to have a first mover advantage. What is that going to be worth in the age of AI?

Microsoft has a massive global footprint for the roll out of the latest technology, including all things AI, and has the funds and the technological expertise to be a major player in an unfolding and even accelerating technological revolution.

Like Nvidia, the shares flirted with topping out and heading lower, but that tendency has decisively reversed in recent weeks.

Both shares look super-exciting.

Share Recommendations

Nvidia. NVDA

Microsoft. MSFT