Hoàng Nhân Huân defends massive spending on AI, Nvidia stocks surge after a series of declines

Nvidia stock made an impressive rebound on Friday, rising 7.7% and recording the largest intraday gain since April, as investors returned to AI-related stocks. This recovery occurred after Nvidia CEO Jensen Huang stated that massive capital expenditures on AI infrastructure are reasonable and sustainable in the long term.

Nvidia’s market capitalization increased by over $300 billion during this trading session, marking a strong revival after its stock experienced five consecutive days of decline, wiping out nearly $500 billion in company value.

Nvidia CEO: AI Demand at Unprecedented Levels

Jensen Huang believes that the demand for artificial intelligence is currently at an “astonishing level.” In an interview that day, he emphasized that building AI infrastructure will be a long-term journey, lasting 7 to 8 years. He stated, “AI has become very useful, and its capabilities are extremely powerful. Adoption and deployment rates are very high.”

Huang also dismissed concerns that tech companies might overbuild infrastructure capacity. Unlike previous periods, current AI projects are not left idle; there is continuous demand from real-world applications.

Tech Giants Continually Invest in AI Infrastructure

Leading technology companies—Amazon, Google (Alphabet), Meta Platforms, and Microsoft—announced massive capital expenditure plans in recent financial reports. These decisions have raised investor concerns about the return on investment for these firms. The combined market cap of these four companies has decreased by nearly $1 trillion recently.

Nvidia plays a central role in these investments, as it produces essential data center processors for developing and operating AI models. A significant portion of the huge capital spending by major tech firms is flowing into Nvidia’s products.

Nvidia Shares Surge, Market Cap Gains $300 Billion

This remarkable rebound reflects a shift in market sentiment—from concerns over excessive spending to confidence in the long-term value of AI investments. Companies like Anthropic PBC and OpenAI are generating substantial revenue, demonstrating that AI projects are not wasteful expenditures but profitable investments.

With positive outlooks from Jensen Huang and clear evidence of AI project value, Nvidia’s stock has regained momentum, marking an important turning point in market perception of the AI investment cycle.