Nvidia's stock price surged nearly 8% on Friday, reaching $185.41 before press time. As market focus returned to the question of whether AI data centers are burning through too much money, Jensen Huang publicly responded to external concerns, emphasizing that the relevant capital expenditures have a realistic basis. His words immediately supported market sentiment. Nvidia will release its financial report at the end of the month. Is there still an opportunity to enter the market now?
Huang Renxun publicly called for action, and Nvidia's stock price surged nearly 8%.
Nvidia (NASDAQ: NVDA) shares rose nearly 8% on Friday, with analysts believing that CEO Jensen Huang's recent public remarks gave the investment market a strong boost. Huang stated that the technology industry's investment of approximately $660 billion in artificial intelligence infrastructure is a reasonable investment. He pointed out that current computing demand comes from cloud services, enterprise applications, and next-generation digital products, and that related investments are not short-term speculation but rather part of long-term structural construction. The investment market interpreted his remarks as helping to alleviate some investors' concerns about excessive AI capital expenditure, thereby boosting the stock price.
Regarding concerns raised by the continued expansion of "AI super data centers" by companies like Meta and Microsoft, Jensen Huang believes that such spending is supported by stable cash flow growth and strong demand. He describes the current expansion as one of the largest infrastructure projects ever undertaken, and that investment in computing power plays a crucial role in future enterprise operational efficiency and service innovation. Furthermore, high hardware utilization is also a supporting factor; even older generation chips remain fully leased, and the revenue growth rate of some AI labs even exceeds the increase in their computing resources.
Jensen Huang: AI can keep existing software usable.
Recently, the launch of Claude, a new tool by AI company Anthropic, triggered a panic sell-off in the investment market, fearing that the entire software industry might be replaced by AI. SaaS software stocks, in particular, nearly collapsed. Jensen Huang publicly refuted this view at the Cisco AI Summit in San Francisco, arguing that the assumption that AI will replace existing tools is "illogical." He pointed out that the latest breakthroughs in AI are built upon the use of various tools and software, and that over time, related applications are more likely to extend the continuation of existing industries rather than completely replace them.
Is it still possible to buy Nvidia now?
Investors hold polarized views on artificial intelligence, keeping Nvidia's stock price highly sensitive. Nvidia (NASDAQ: NVDA) is a pillar of the AI economy; its profits not only affect its own investors but also impact the entire AI industry chain in the US and globally. Nvidia will release its earnings report on February 25th. So, should one buy now or wait and see?
Nvidia's financial position remains very strong, reporting revenue of $57 billion as of the end of last quarter, a 62% increase year-over-year. Nvidia's GAAP-adjusted gross margin is also remarkable at 73%.
In terms of its balance sheet, Nvidia currently holds approximately $61 billion in cash and marketable securities. This AI leader has total liabilities of only $42 billion, giving Nvidia a very strong economic moat. Therefore, even if the industry experiences a downturn, Nvidia is well-prepared to withstand the long-term impact.
Nvidia's biggest threat right now is that customers are slowing down their spending on artificial intelligence. Reduced capital expenditures will cause some concern for Nvidia, especially in the data center sector, where nearly 90% of its revenue currently comes from. This is purely market observation and not investment advice.
This article, in which Jensen Huang personally responded to concerns about the high costs of AI infrastructure, caused Nvidia's stock price to surge by nearly 8%. It first appeared on ABMedia, a ABMedia .
