Nvidia CEO Jensen Huang’s keynote at Computex has seemingly silenced growing concerns about the profitability of the artificial intelligence boom, according to CNBC’s analysis. Huang’s central message – that “compute is revenue” – resonated powerfully, driving a significant rally in AI-centric stocks and reaffirming Wall Street’s faith in the sector.
The semiconductor giant’s stock saw a substantial 6% surge on the day, contributing to the broader market’s upward momentum, with the S&P 500 closing at a new record high. This performance is particularly noteworthy given broader market headwinds, including rising oil prices and geopolitical tensions.
“It was incredibly heartening at a time when we’re getting very suspicious of the data center as a concept, let alone a profit center,” a prominent analyst commented, reflecting a sentiment of skepticism that had begun to cloud the AI infrastructure narrative. Prior to Huang’s address, there was a palpable sense among market observers that the prevailing sentiment questioned whether the immense capital being invested in AI infrastructure would yield commensurate returns, a concern often voiced by those who believe the market is approaching a bubble.
Huang’s declaration that “compute is revenue” served as a direct counterpoint to these anxieties. This assertion, emphasizing the direct correlation between computational power and commercial value, was a pivotal moment, aiming to validate the substantial investments being made. The message was not lost on key players in the AI ecosystem. Huang specifically highlighted major data center operators and Nvidia’s chip clients, including Oracle, CoreWeave, and Nebius.
The market’s reaction underscored the impact of Huang’s pronouncements. Oracle, which has faced scrutiny regarding its aggressive AI infrastructure spending, saw its shares climb nearly 10%. Cloud computing provider CoreWeave, also having to defend its capital expenditure and debt levels, experienced an impressive 14% uplift. Similarly, Nebius witnessed a significant jump of over 14.5%.
Furthermore, the keynote bolstered the strategic investment thesis for owning Nvidia in conjunction with hyperscale cloud providers like Amazon and Alphabet. Despite these tech giants developing their own custom AI chips, which compete directly with Nvidia’s offerings, the argument for holding all three remains strong. The prevailing view suggests that the sheer scale of the AI opportunity justifies such a diversified approach, allowing investors to capitalize on different facets of the rapidly evolving AI landscape.
In essence, Jensen Huang’s Computex presentation successfully recalibrated the market’s perception, providing a clear and compelling vision for the economic viability of AI infrastructure. By framing compute power not just as a cost but as a direct driver of revenue, Nvidia has effectively allayed fears of an AI bubble, solidifying its position and that of its ecosystem partners at the forefront of this transformative technological shift. This strategic communication has reaffirmed investor confidence at a critical juncture, underscoring Nvidia’s continued dominance in the AI era.
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