Investors and journalists lined up more than an hour before the session just to catch a glimpse of one of the world's most sought-after CEOs. Huang told the audience that although generative AI is still in its early days, it’ll expand beyond data centers.
 

Key points:

1.       August inflation was cooler than expected, setting up the Federal Reserve to cut rates next week.
2.       Nvidia should benefit from lower interest rates, as it will help its valuation and encourage economic growth and investment in AI infrastructure.
 

What is Nvidia (NVDA) CEO Jensen Huang's biggest worry?

“We have a lot of people on our shoulders, and everybody is counting on us,” Huang said when asked that question by Goldman Sachs CEO David Solomon at the Goldman Sachs Communacopia and Technology Conference.

“Demand is so great that delivery of our components, our technology, infrastructure, and software is really emotional for people," Huang added. "Because it directly affects their revenues, it directly affects their competitiveness.”

Eager to catch a glimpse of one of the world's most in-demand CEOs, investors and journalists began gathering over an hour before the session started. Huang addressed the crowd, stating that while generative AI is still in its infancy, its influence will soon extend beyond data centers.
 

“Now what’s amazing is, so the first trillion dollars of data centers is going to get accelerated and invented this new type of software called generative AI. Generative AI is not just a tool, it’s a skill," Huang told Solomon.

"For the first time, we’re going to create skills that augment people.”

Good inflation news and other factors drove Nvidia up today

Nvidia shares surged today, driven by several factors: a lower-than-expected inflation report, a positive reception to its presentation at a Goldman Sachs conference, and news that the U.S. government may permit the company to export chips to Saudi Arabia. These developments pushed Nvidia's stock up by 8%.

Chip stocks broadly rallied in response to the inflation report, with the iShares Semiconductor ETF rising 4.6%, while the Nasdaq Composite gained 2.2%.

Investors and journalists lined up more than an hour before the session just to catch a glimpse of one of the world's most sought-after CEOs. Huang told the audience that although generative AI is still in its early days, it’ll expand beyond data centers.
 

Falling interest rates are good for Nvidia

Investors initially appeared uncertain about the impact of the US CPI report, which showed a 2.5% year-over-year rise in inflation for August. However, by the afternoon, the Nasdaq was surging, led by Nvidia.

Nvidia servers "look expensive, and it could be a couple of million dollars per rack, but it replaces thousands of nodes," Huang said. "The amazing thing is the cables of connecting old, general purpose computing systems cost more than replacing all of those and densifying into one rack."

The Federal Reserve is expected to cut interest rates next week, though it's unclear whether the reduction will be by 25 or 50 basis points. The ideal outcome for Nvidia would be a scenario where interest rates fall while the economy remains stable or strengthens. Lower rates increase the value of growth stocks and could boost borrowing for investments in artificial intelligence (AI) infrastructure, driving demand for Nvidia's components.
 

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