Nvidia shares were jittery on Thursday as investors questioned whether the two-week truce between the US and Iran would hold. competition

The stock was up 0.7% to $183.75, after closing 2.2% higher in the previous session.

The S&P 500 was largely flat.

Geopolitical uncertainty continues to weigh on risk appetite, with the durability of the ceasefire seen as key to any sustained market rebound.

Nvidia has been one of the biggest beneficiaries of the artificial intelligence rally in recent years.

However, the stock has traded within a narrow range of $165 to $195 for several months.

Investors are increasingly looking for catalysts that could push shares out of this range.

Stability in geopolitical conditions is seen as one such trigger, as ongoing tensions have dampened demand for risk assets.

AI spending sustainability in focus

A central concern for investors is the durability of AI-related capital expenditure.

Large technology companies, often referred to as hyperscalers, have driven demand for Nvidia’s chips through heavy investment in data centres and AI infrastructure.

However, questions are emerging about how long this pace of spending can continue and when it will translate into meaningful returns.

Key customers, including Microsoft, Alphabet, and Amazon, continue to invest aggressively, but investor confidence in the timing of monetisation has weakened.

At the same time, software stocks have come under pressure amid concerns that AI could disrupt traditional business models and compress margins.

The combination of geopolitical uncertainty, questions around AI spending, and rising competition is shaping sentiment toward Nvidia.

While demand remains strong, investors are increasingly focused on long-term returns and competitive dynamics within the AI hardware market.

Amazon signals growing competition

Fresh commentary from Amazon has added to concerns about rising competition in AI chips.

Andy Jassy said in his annual shareholder letter that the company is considering selling its own AI processors to third parties, potentially increasing competition with Nvidia and Advanced Micro Devices.

Jassy said AI is not a bubble and that returns on investment should be “appealing,” citing strong adoption and rapid growth in Amazon Web Services.

He also highlighted demand for Amazon’s custom chips.

The Trainium2 chip is sold out, while Trainium3 is “nearly fully-subscribed” shortly after its early 2026 launch.

“Having our own hotly demanded AI chip opens up many possibilities, but perhaps none larger than the ability to lower costs for customers and secure better economics for AWS,” Jassy said.

“At scale, we expect Trainium will save us tens of billions of capex dollars per year, and provide several hundred basis points of operating margin advantage versus relying on others’ chips for inference.”

According to Jassy, Amazon’s chip operations currently generate about $20 billion in annual revenue, growing at triple-digit rates.

He added that if the business were operated independently, it could reach a run rate of roughly $50 billion, as current figures only capture monetisation through AWS services.

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