Subscription Model vs. One-Time Sale: Which is Better for Long-Term Investors?
The Advantages of Subscription Models over One-Time Sales
Subscription businesses are better over the long term
The predictability and stability of subscription revenue can outweigh the boom-and-bust cycles of companies relying on one-time sales. Amazon, Microsoft, and Alphabet's cloud computing segments offer recurring revenue streams, contrasting Nvidia's product-oriented business.
The Impact of Cloud Computing on Nvidia
Nvidia primarily sells GPUs to cloud computing giants like Amazon, Microsoft, and Alphabet, benefiting from their continuous demand for computing power. However, Nvidia's reliance on product sales poses risks amid fluctuating market trends and technological shifts.
Nvidia revenue drops significantly during demand downturns, highlighting the uncertainties of its business model compared to the subscription-based revenue of cloud computing providers.This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.