The surge in the Nvidia share price has been incredible to watch. They make the best chips around, and customers can't get enough of them, which allows Nvidia to charge massive profit margins. I recently saw two articles highlighting the lengths that customers will go to get their hands on Nvidia chips.
Andreessen Horowitz, a leading US venture capital firm, revealed that they have stockpiled Nvidia chips worth a couple hundred million dollars. The idea is to give the startups in their portfolio access to these chips. It is a great way to give their companies an advantage over the competition, who will probably be hamstrung by limited access to Nvidia chips. Having the stockpile also gives Andreessen Horowitz more bargaining power when it comes to investing in new startups.
Another article spoke about the black market in China for Nvidia's latest chips. The US has placed restrictions on what chips can be sold to China. It means that the only chips in China now, have been smuggled in, and trade at a massive premium on the black market.
As long as buyers keep going to extraordinary lengths to get their hands on Nvidia chips, the Nvidia share price should continue to do well.