Nvidia Corp. Chief Executive Jensen Huang said the scramble for limited supplies has frustrated some customers and heightened tensions. Nvidia’s products have become the hottest commodities in tech. “The demand for it is so great, everybody wants to be first, everybody wants the most,” he told an audience at a Goldman Sachs Group Inc. technology conference in San Francisco. “We probably have more emotional customers right now. Well deserved. It’s nervous. We’re doing the best we can.”

He told the audience that demand for the company’s latest generation of chips, called Blackwell, is strong. The Santa Clara, California-based company outsources physical production of its hardware, and Nvidia’s suppliers are catching up, he said.

Data center operators use Nvidia's chips to develop and run artificial intelligence models. Frenzy demand for such services has driven its sales and stock price to soar. The company's shares have more than doubled this year after rising 239% in 2023. The stock rose 8.1% to $116.91 in New York on Wednesday, marking its biggest one-day gain in six weeks. But the company relies on a small number of customers, such as data center operators such as Microsoft (MSFT) and Meta Platforms Inc. (META), for most of its revenue.

Huang was asked whether massive AI spending is providing a return on investment for customers, which has been a concern amid the tech industry’s AI boom. But he said companies have no choice but to embrace “accelerated computing.” He said Nvidia’s technology speeds up traditional workloads — data processing, as well as processing AI tasks that older technologies can’t handle.

Huang said Nvidia relies heavily on TSMC to produce its most important chips because the company is so far ahead in the field. But geopolitical tensions also increase risks. He said he develops much of the company's technology himself, which should allow Nvidia to shift orders to other suppliers. However, he said such a change could cause the quality of his chips to decline. "TSMC is incredibly agile and responsive to our needs," he said. "So we use them because they're great, but if necessary, of course, we can always come up with others."

Huang Renxun's remarks were exactly what the market wanted to hear, and Nvidia's strong performance overnight also successfully led a V-shaped reversal of the U.S. stock market.

The S&P 500 rose 1.1% and the Nasdaq 100 gained 2.2%, with both indexes falling more than 1.5% intraday. "Stocks initially fell following the CPI release before rebounding as bargain hunters moved in again," said Fawad Razaqzada of City Index and Forex.com. "September has historically been challenging for stocks, though, and that could prove to be the case again as we head deeper into the month."

Skyler Weinand of Regan Capital believes we should expect "smoother sailing" after the Fed's first rate cut and the election as uncertainty recedes.

Article forwarded from: Jinshi Data