The chip giant has become the corporate equivalent of the Los Angeles Dodgers as it outspends and outmaneuvers the competition

Nvidia alone now represents roughly 8.3% of the S&P 500's total market cap.

Nvidia's so good, it could soon be bad for everyone.

The company's latest quarterly results, including $96 billion in sales and $59.7 billion in earnings, were predictable. Wall Street's expectations, which were below those numbers, were just as predictable.

We've been here before: Nvidia (NVDA) has beaten sales expectations for 20 quarters in a row (five years straight) and topped earnings in all but one of those quarters, according to FactSet.

See also: Nvidia earnings send the stock higher. Here's everything you need to know.

Nvidia is Wall Street's version of the Los Angeles Dodgers. Outspending, outmaneuvering, outhustling the competition. The company is maximizing every advantage. Is there a chance someone might overtake it, if only for a moment? Sure, but we all know it would be a fluke. There's just too much talent, too much market power. The product is just too damned good for anyone not to recognize that Nvidia and its baseball doppelgänger are in a league of their own.

Neither the Dodgers nor Nvidia have done anything wrong. They're both playing inside the rules. They've both used financial muscle to tilt the playing field.

Critics argue the Dodgers have taken the competition out of baseball. Nvidia has a similar but bigger problem: It's so consequential that it's become a systemic risk. If the Dodgers don't win, everyone who's not a Dodger fan is happy. If Nvidia stumbles, your portfolio, and perhaps the broader economy, is going to take a beating, even if you don't own the stock.

Too big but still able to fail

That's because Nvidia is too big and wide in equity markets, including the S&P 500 SPX and the Nasdaq Composite Index COMP. Its results are helped by circular financing deals that, while not unprecedented, have never been used at the scale Nvidia Chief Financial Officer Colette Kress and advisers have used them. In short, Nvidia puts its counterparts in these deals at risk and vice versa. Consider the following:

-- Too damned big. At a valuation of nearly $5.6 trillion, Nvidia now represents roughly 8.3% of the S&P 500's total market capitalization and about 13.6% of the Nasdaq 100's. As a share of the market, AT&T (12.7% in 1922), Standard Oil (9% in 1900) and General Motors (8% in 1928) were bigger, but unlike those companies, Nvidia poses a bigger problem than its sheer size because of its financing maneuvers.

-- Circular finance. Nvidia essentially helps its customers pay for Nvidia chips by buying equity (about $70 billion) in companies like OpenAI and Anthropic. Earlier this month, Nvidia announced a plan with six Wall Street firms to raise up to $500 billion from asset managers to fund the deals through bonds and private capital (loans), secured by the chips. Nvidia agreed to eat a quarter of the loss of the chips that don't hold their value. This risk doesn't show up unless a loss is triggered. In other words, it's off the balance sheet.

-- A "systemic threat." In May, the Cloud Security Alliance published research that showed Nvidia's market dominance to be a major component of an overall artificial-intelligence industry systemic security threat. It concluded: "Making that fragility visible, and managing it systematically, is the work the security community needs to undertake now, before the next cascading failure makes the stakes undeniable."

Some have argued that because Nvidia and the AI industry in general are benefiting business with improved efficiency, innovation and - let's just be blunt - the ability to shed labor costs, size is a net benefit to the market and economy. In other words, Nvidia and AI are making all companies better.

But even if you acknowledge the upside, you must accept the inverse is true, too. If nearly all public companies are so deeply tied to an AI hardware supplier with nearly 90% market share, hundreds of billions of dollars in customer-financing deals and a potential massive security vulnerability, then the potential loss is as great as the potential gain.

Past results do not predict future performance

Nvidia looms over the market like AT&T (T), General Motors $(GM)$ and Standard Oil once did. And the obvious argument for Nvidia bulls is that those companies did just fine. They truly were transformative leaders in new industries, and investors were right to build them up.

But I'm not the first one to note how the sheer size of Nvidia and AI debt is already creating problems for the economy. The hunger for capital has pushed bond yields higher, even in sovereign debt. Nine of the biggest tech companies have a combined $3 trillion in off-balance-sheet commitments tied to new computing power. Nvidia sits at the center of all this. It owes and is owed.

Investors, whether they hold Nvidia or not, are at risk. The Nvidia gorilla is so big, the debt required to keep it growing so huge, that the cost of everything from bonds to mortgages is creeping up. There's only so much capital to go around.

Ultimately, Nvidia might be just another AT&T - a company with such an innovative product, it just can't lose. But be careful here. We were told the same thing about owning a home in 2006. Investors were told the same thing about AOL TimeWarner in 2000, and RCA in 1928.

Do I think the Dodgers are the best bet to win the World Series? Yes. But I also know that the Dodger monolith has become so big that the game itself is at risk for next season.

Nvidia is a big winner so far, but if it makes an error it can't recover from, it will be game over.

-David Weidner