The short and quick ending! What did Huang Renxun say at the NVIDIA shareholders' meeting that failed to reverse the stock price decline?

Author: Li Dan

Source: Hard AI

As the hot stock market in the field of artificial intelligence (AI) shows signs of fatigue this year, the highly anticipated annual shareholder meeting failed to reverse the downward trend of NVIDIA's stock price.

On Wednesday, June 26th, Eastern Time, NVIDIA's shareholder meeting lasted only about 30 minutes. According to the agenda, shareholders voted to approve all 12 nominated NVIDIA directors, including CEO Jensen Huang, and their compensation plans. They also agreed for PricewaterhouseCoopers to continue as the independent registered public accounting firm for NVIDIA for the fiscal year 2025, responsible for auditing NVIDIA's financial reports.

Under the compensation plan, Jensen Huang will receive a compensation of around $34 million for the fiscal year 2024, a 60% increase from the fiscal year 2023. NVIDIA executives' compensation is largely tied to performance. Previously, it was estimated by the media that about 78% of Jensen Huang's compensation comes from stock rewards, so an increase in NVIDIA's stock price translates to an increase in his compensation.

During this meeting, NVIDIA did not announce any new products, and no executives made any statements regarding new products. Investors had a lukewarm response to the meeting based on the stock price performance. NVIDIA's stock price maintained a decline of over 2% during the meeting, falling back after a 6.8% rebound on Tuesday. It dropped by 2.8% after an initial rise in the morning session, marking the fourth consecutive day of decline in the past five trading days.

Wall Street News noted that before the meeting, there were comments suggesting that NVIDIA might not release any groundbreaking achievements this time, but Jensen Huang and other NVIDIA executives might take the opportunity to emphasize NVIDIA's achievements in the AI boom and showcase the company's long-term growth prospects. Some also believed that any comments made by Jensen Huang could be a driving force for the stock price. Jensen Huang's remarks on AI chips during his recent trip to Asia had triggered a stock price rebound, and his related comments could boost market sentiment, making investors feel that NVIDIA has not yet reached its revenue peak.

During this meeting, although Jensen Huang attended and answered several shareholder questions, there were highlights despite not causing much of a stir among stock market investors at first glance.

Jensen Huang is optimistic about the prospects of the Blackwell platform released in March this year. He said:

"The Blackwell architecture platform is likely to become the most successful product in NVIDIA's history and in the history of computing."

Some netizens commented that this is a significant statement, especially considering NVIDIA's competition with Microsoft.

Some netizens mentioned that this is the reason why Jensen Huang sold his shares at the peak of NVIDIA's stock price. However, others explained that Jensen Huang's sale of NVIDIA shares was a pre-existing plan and accounted for less than 1% of all the shares he holds

Huang Renxun stated that NVIDIA's advantage in the AI chip field stems from its investment over a decade ago, investing billions of dollars in AI and assembling a team of thousands of engineers.

When asked about the competition NVIDIA faces, Huang Renxun did not specifically name any competitors, but instead outlined NVIDIA's overall strategy to maintain its leading position. He first mentioned that NVIDIA has transitioned from a company focused on gaming to one focused on data centers, and aims to open up new markets for the company's AI technology, such as industrial robots, and plans to collaborate with all computer manufacturers and cloud service providers.

Huang Renxun said that NVIDIA's AI chips offer the "lowest total ownership cost (TOC)". This means that while other chips may be cheaper, considering performance and operating costs, NVIDIA's chips are more cost-effective for users.

Finally, Huang Renxun stated that NVIDIA has achieved a "virtuous cycle". This means that when a platform has the most users, it can make necessary improvements to attract more users. Huang Renxun said that NVIDIA's platform is widely available through all major cloud service providers and computer manufacturers, creating a large and attractive installed base for developers and customers, making NVIDIA's platform more valuable to customers.

One shareholder asked about NVIDIA's plans for quantum computing, to which Huang Renxun said he believes "practical quantum computing will still take decades", and when it arrives, "computing algorithms will be a combination of acceleration and quantum methods".

Another shareholder asked how NVIDIA plans to deal with the tight market environment for semiconductor manufacturing capacity. Huang Renxun replied that NVIDIA "has the expertise and scale to develop a resilient supply chain", and then said that NVIDIA can sign long-term supply agreements or prepay for manufacturing capacity costs to ensure meeting customer demand.

NVIDIA's shareholder meeting coincides with the recent cooling off of the AI concept stocks led by the company. On Monday, NVIDIA fell nearly 6.7%, marking its largest daily decline in two months. As of Monday, it has fallen nearly 13% over the three trading days of the week, falling from briefly becoming the global stock king last week to entering a correction phase in less than a week, with a total market value evaporation of $430 billion over the three days, marking the largest three-day market value decline in the history of all individual stocks. On Tuesday, NVIDIA's stock price and market value surpassed the $3 trillion mark, but on Wednesday it returned to a downward trend.

Investors are looking forward to new catalysts for the rise of the AI and chip industries. NVIDIA's relatively calm shareholder meeting on Wednesday did not play this role, as market attention now shifts to Micron Technology's earnings report after Wednesday's market close