I Was Convinced the Nvidia Bubble Was About to Burst. I Was Looking at the Wrong Metrics.

For the better part of a year, I’ve been a card-carrying member of the Nvidia skeptic’s club. My arguments felt not just compelling, but self-evident. When reports surfaced that a titan like OpenAI was diversifying its workloads to Google’s TPUs, I saw it as the first major crack in the fortress walls—proof that even the most reliant customers were desperately seeking an escape from Nvidia’s orbit. I wasn’t just reporting on the narrative; I was a believer in it.

Then came the deluge of headlines about insider stock sales. Over a billion dollars. To me, and to many I spoke with, this was the ultimate tell. Here were the architects of the AI revolution, the very people with the deepest insight into the company’s future, seemingly cashing their chips out at the top. It fit my thesis perfectly: they knew the peak was in, and this was the smart money making its exit before the inevitable correction. I would nod knowingly as I read about the intensifying competition from AMD, Broadcom, and a rising Huawei, viewing Nvidia's staggering market share not as a sign of strength, but as a precarious pinnacle from which the only way was down. The story wrote itself: a dominant, but ultimately vulnerable, king whose reign was nearing its end.

I was so confident in this narrative that I nearly missed the truth. My change of heart wasn’t sparked by a glowing earnings report or a slick keynote from CEO Jensen Huang. It was far more mundane, and far more profound. It happened during a late-night, off-the-record call with a senior engineer I’ve known for years. He works at a major cloud provider—a direct competitor in some respects—and is one of the most cynical people I know about corporate hype. I was laying out my 'peak Nvidia' thesis to him, expecting validation. Instead, he just laughed.

"You're looking at the chips," he said, his voice laced with the weary patience of someone explaining a fundamental law of physics. "The hardware is the headline, but it's not the story. You're completely missing the moat. The real moat is CUDA."

That one word—CUDA—was the catalyst. It forced me to confront a wave of cognitive dissonance. I knew of CUDA, of course. Nvidia's parallel computing platform and programming model. But in my mind, it was a technical detail, a feature. I had fundamentally failed to grasp its strategic significance. That conversation sent me down a rabbit hole, not of press releases, but of developer forums, technical papers, and conversations with the people who actually build AI systems. And I emerged with a difficult realization: my entire narrative, built on what seemed like solid evidence, was fundamentally flawed.

Let’s start with the belief that I held most dearly: the OpenAI diversification. I saw it as a direct rebuke of Nvidia's indispensability. It was the poster child for customers fleeing high costs and vendor lock-in. What I failed to appreciate was the sheer, mind-boggling scale of the demand for AI compute. The AI industry is not a zero-sum game where one company’s gain is another’s loss. It is an exponentially expanding universe. OpenAI using Google's TPUs isn't an act of replacement; it's an act of supplementation. It’s a sign that the demand for AI infrastructure is so vast that even a giant like OpenAI needs to leverage every available resource. A world-class restaurant doesn't just have one type of oven. It has a high-tech convection oven for precision, a broiler for searing, and maybe a wood-fired oven for specialty dishes. Each has its purpose. Right now, Nvidia’s platform is the entire state-of-the-art kitchen, and competitors are building excellent specialty ovens. My perception of a single pie being divided was wrong; the pie is growing faster than anyone can bake.

Next, I had to confront the insider selling. That billion-dollar figure felt so damning. It was the emotional core of the bearish argument—the ultimate signal of a lack of faith from the inside. But my focus on the headline number was a classic case of missing the forest for the trees. When I dug into the SEC filings, a different picture emerged. Many of these sales were part of pre-scheduled 10b5-1 trading plans, set up far in advance to allow executives to sell stock in a planned, transparent way. More importantly, I started looking not at the dollars sold, but at the shares kept. Jensen Huang, after selling hundreds of millions of dollars in stock, still owns a stake in Nvidia worth tens of billions. His personal wealth is overwhelmingly tied to the company's long-term success. What I had interpreted as a panicked sprint for the exit was, in reality, prudent financial planning. When your personal holdings are that vast, diversifying a tiny fraction is not a vote of no confidence; it's just common sense. The real story wasn't the small percentage they sold; it was the colossal stake they chose to keep.

Finally, this brought me back to the engineer’s comment about the CUDA moat and my belief in the 'inevitable' rise of competition. I had viewed the market as a hardware battle: Nvidia’s H100 versus AMD’s MI300X versus Google’s TPU. A war of speeds and feeds. But it's not a hardware war; it's a platform war, and Nvidia has a two-decade head start. CUDA is more than software; it's an ecosystem. It’s millions of developers, data scientists, and researchers who have spent their careers learning and building on this specific platform. It’s the vast libraries, diagnostic tools, and development kits that Nvidia has poured billions into creating. Asking a company to switch its core AI development from the Nvidia ecosystem to a competitor's is not like swapping one graphics card for another. It’s like asking a city built around the automobile to suddenly switch to maglev trains. It's a monumental undertaking, fraught with cost, risk, and the immense challenge of retraining an entire workforce. Competitors are making great chips, but they are competing with Nvidia’s silicon and twenty years of ecosystem development. That is a mountain, not a moat.

I am not here to tell you that Nvidia is a company without risk or that its stock is a guaranteed ticket to riches. The competitive threats are real, and the market is watching every move its customers make. But I was wrong. My skepticism was built on a surface-level reading of the headlines—the crashing waves of market noise. I failed to look deeper, into the powerful, quiet engine room of the software ecosystem that drives the entire industry forward. I saw signs of weakness where I should have seen signs of a maturing, exploding market. The journey from my old certainty to my current understanding was a humbling one, and it forced me to question the very way I analyze a company's dominance. I was wrong about Nvidia because I mistook the weather for the climate.