Nvidia’s CEO, Jensen Huang, has expressed concerns regarding the company’s precarious position in the face of rising fears about an artificial intelligence (AI) bubble. During an internal meeting this week, Huang described the situation as a “no-win” scenario, even as Nvidia continues to report impressive financial results. His remarks were revealed in audio obtained by Business Insider.
Despite delivering another record earnings report, which included “visibility” into approximately $500 billion in revenue for 2025 and 2026, Huang noted that the market’s reaction was less than favorable. “The market did not appreciate our incredible quarter,” he stated, reflecting on the surprising shift in investor sentiment that saw Nvidia’s stock initially rise before closing lower on Thursday, September 14, 2023.
Huang highlighted that Wall Street’s expectations have reached such extremes that any performance, good or bad, is now viewed through the lens of potential AI market instability. He remarked, “If we delivered a bad quarter, it is evidence there’s an AI bubble. If we delivered a great quarter, we are fueling the AI bubble.” This sentiment illustrates the heightened scrutiny Nvidia faces as a key player in the AI sector.
Despite reporting a surge in sales of its data-center processors, which are essential for powering large AI models, Nvidia’s stock experienced a downturn. Shares rose as much as 5% during the day but ultimately closed down by about 3%. This volatility reflects a broader trend in the technology sector, where investors are increasingly wary of aggressive spending on data centers and related infrastructure without guaranteed returns.
Investors have pointed to concerning financing structures associated with the AI industry’s growth, as credit markets show early signs of distress. Additionally, a mixed U.S. jobs report released on the same day, which indicated stronger-than-expected hiring but a rising unemployment rate, added to the uncertainty surrounding Federal Reserve monetary policy. As the Fed’s next decision looms, many investors appear to be capitalizing on recent volatility to secure profits from earlier gains.
Mark Hackett of Nationwide commented on the prevailing market narrative, suggesting, “The broader narrative hasn’t broken; it’s simply being tested right now.” He emphasized that such periods of uncertainty often act as a release valve rather than signaling a significant trend reversal.
Inside Nvidia, Huang acknowledged the pressure from investors, referencing online memes that humorously portray the company as a crucial element of the global economy. “We’re basically holding the planet together—and it’s not untrue,” he remarked, indicating the extraordinary expectations surrounding Nvidia’s performance.
The narrative surrounding Nvidia has propelled its market value to unprecedented heights, making it the world’s most valuable public company. Huang underscored the intense scrutiny the company faces, stating, “The expectations are so high that if we miss by just a little bit, people think the whole story is broken.”
Amidst these pressures, Huang maintained a light-hearted tone during the meeting, joking about the company’s fluctuating market capitalization. “Nobody in history has ever lost $500 billion in a few weeks,” he quipped, highlighting the dramatic changes in value the company has experienced.
Despite the challenges, Huang expressed pride in Nvidia’s achievements and confidence in its underlying business model. He reassured employees that the company’s fundamentals remain robust, even amid market fluctuations. As Nvidia navigates this complex landscape, the focus remains on its ability to adapt and thrive in an evolving AI economy.
