Jensen Huang "Versailles" exclaimed: Products are too hot to handle, making customers unhappy! NVIDIA once again saves the US stock market

According to the financial news app Zhitong Finance, Jensen Huang, CEO of NVIDIA (NVDA.US), stated at a technology conference organized by Goldman Sachs on Wednesday that due to limited product supply, some customers are feeling frustrated, leading to strained relationships between the company and these customers.

Huang said, "The demand is very strong, everyone wants to be the first to receive the goods, everyone wants to receive the most products." "We may now have more emotional customers, which is understandable. The situation is a bit tense now, and we are doing our best." He added that there is strong demand for the latest generation chip, Blackwell GPU, and suppliers are catching up.

Furthermore, when asked whether the massive spending on artificial intelligence provides investment returns for customers - a concerning issue during this AI boom, Huang mentioned that besides embracing "accelerated computing," companies have no choice. He pointed out that NVIDIA's technology speeds up traditional workload processing and can handle AI tasks that old technologies cannot cope with.

Huang also mentioned that NVIDIA heavily relies on TSMC in chip production because the latter is leading in the chip manufacturing field. He added that most of the company's technology is self-developed and has the ability to transfer orders to other suppliers, but such changes may lead to a decrease in chip quality. He said, "TSMC's sensitivity and ability to respond to our demands are incredible. We chose them because they are truly outstanding. But if necessary, we can certainly use other suppliers."

NVIDIA Once Again Becomes the "Savior" of US Stocks

Huang's remarks on the "huge demand for AI chips" on Wednesday can be said to have saved the US stock market, causing major stock indices to completely erase their intraday declines and achieve a V-shaped rebound, especially in the technology and chip sectors.

Data shows that on Wednesday, NVIDIA initially fell slightly below $107 in early trading, but with Huang's speech, the gains continued to expand, rising as much as 8.4% to briefly surpass $117, with the intraday range from low to high reaching up to 9%. NVIDIA closed up 8.15% on Wednesday, at $116.91.

With the rise of NVIDIA, the S&P 500 index turned from an early 1.6% decline to a rise of over 1%, the Dow Jones index turned from an early 1.8% decline to a 0.3% rise, the Nasdaq index turned from an early 1.4% decline to a rise of over 2%, with an intraday range of over 630 points or 3.8%, and the Philadelphia Semiconductor Index turned from a 1.4% decline to a nearly 5% rise.

Analysts pointed out that this is the first time since October 2022 that the S&P 500 and Nasdaq 100 indices have completely erased intraday declines of at least 1.5%. It can be said that NVIDIA single-handedly erased the impact of the US August CPI data on the stock market earlier on Wednesday.

NVIDIA's stock price has nearly increased by 500% in the past 12 months. However, NVIDIA experienced a significant 14% drop last week, causing a $400 billion market value loss. Investors are now starting to worry that the AI boom that has been driving the rise of the US stock market may soon fade due to slowing economic growth hindering demand, and they are also puzzled about whether the massive spending on AI by companies will generate substantial returns Therefore, many analysts believe that Jensen Huang's speech is seen as an opportunity to calm investor nerves. Despite sounding somewhat "Versailles," Jensen Huang's emphasis on the "huge demand for artificial intelligence chips" is key to driving the reversal of NVIDIA's stock price and the US stock index. Jensen Huang also stated that generative artificial intelligence is still in its early stages and will expand into more areas outside of data centers, igniting imagination for future growth.

Some media outlets pointed out that the financial report of Oracle (ORCL.US) released this week has made people realize that the demand for NVIDIA's artificial intelligence chips is expected to remain strong. In addition, xAI, an artificial intelligence startup under Musk, is heavily using NVIDIA GPUs to build its Colossus AI training infrastructure. Meta has long planned to purchase NVIDIA chips worth billions of dollars by the end of this year. NVIDIA's customers also include Microsoft (MSFT.US) and others. These large tech customers focusing on expansion are enough to make NVIDIA dominate the artificial intelligence chip market.

What is the outlook for NVIDIA's stock? Mixed opinions from Wall Street banks

NVIDIA's Q2 revenue and earnings per share announced at the end of August both greatly exceeded expectations. The Q2 revenue increased by 122% year-on-year, with an adjusted (under NON-GAAP standards) earnings per share of $0.68, a 152% year-on-year increase, surpassing analysts' expectations of $0.64. However, in the second quarter, the extent to which NVIDIA's performance indicators exceeded expectations was the smallest in the past 6 quarters.

In terms of overall performance expectations, NVIDIA expects that the third-quarter revenue as of October will be approximately $32.5 billion, implying a growth of about 80% compared to the same period last year, higher than the analysts' average estimate of $31.7 billion. However, the market's highest expectation for NVIDIA's Q3 revenue reaching an astonishing $37.9 billion has raised concerns to some extent about its explosive growth rate slowing down.

NVIDIA's stock price experienced significant fluctuations after the latest financial report was released, partly due to a series of weak US economic data. In addition, NVIDIA's high price is also a reason why some investors are not optimistic about it, with NVIDIA's price-to-earnings ratio slightly above 56x after announcing its performance, which was close to 80x in July.

However, according to Goldman Sachs' renowned analyst Toshiya Hari, NVIDIA was oversold last week. Toshiya Hari maintained a "buy" rating on NVIDIA this week. He stated, "NVIDIA's recent performance has not been great, but we still like this stock. First of all, the demand for accelerated computing remains very strong. We tend to spend more time on super large-scale enterprises, such as Amazon (AMZN.US), Google (GOOGL.US), Microsoft, and other global giants, but what you will see is that the demand is expanding to enterprises, and even sovereign countries."

Goldman Sachs pointed out that with profound generational technological changes like artificial intelligence, "making judgments based on short-term cost and return economics will be futile." The focus will be on the long term. Goldman Sachs estimates that by the second half of 2025, generative artificial intelligence will begin to make a substantial contribution to industry growth When Toshiya Hari talked about NVIDIA, he said, "Their competitive position remains very solid. We do believe that in the commercial chip field, NVIDIA is the preferred choice. Even compared to custom chips, they also have an advantage in terms of innovation speed."

However, Citigroup US stock strategist Scott Chronert believes that NVIDIA may be becoming a large growth stock that is no longer exciting and innovative. He warned during NVIDIA's recent sharp decline last week, "Simply looking at the deceleration in the growth rate of their performance outlook, one can see that its most profound performance and fundamental impact on the market may have already passed."

Jensen Huang's significant sale of NVIDIA shares is not "topping out"

It is worth noting that Jensen Huang's recent significant sale of NVIDIA shares has sparked speculation about whether he is "topping out." It is reported that in a series of transactions from June 13 to September 4, Huang sold nearly 5.3 million shares of NVIDIA stock at a price of 120,000 shares per transaction, totaling approximately $633 million.

Data shows that Huang has been selling NVIDIA shares worth about $14 million almost every day in recent months. However, Huang's recent stock sales were all conducted through the 10b5-1 trading rule, which means that the stock sales were not panic selling or so-called "topping out." According to the latest filing from the U.S. Securities and Exchange Commission (SEC) on September 5, these transactions are part of a 10b5-1 rule trading plan established earlier this year. As per the plan arrangement, Huang will sell up to 6 million shares of NVIDIA stock by March 31, 2025.

Regarding why Huang has been selling NVIDIA shares intensively, a former U.S. company executive analyzed, "He may have to sell some shares to pay taxes, or for some other daily expenses, or to buy real estate, because their cash compensation may not be enough to cover these. And Huang holds too many NVIDIA shares, the portion sold is only a very small part of what he holds, not enough to make you think he is trying to create a high-priced sell-off." Huang is the largest individual shareholder of NVIDIA, holding approximately 3.5% of the company's outstanding shares as of August 9