TLDR
- Nvidia shares climbed nearly 8% Friday following CEO Jensen Huang’s defense of the tech sector’s AI infrastructure investments
- Tech giants could collectively spend $660 billion this year on AI capex, with much going toward Nvidia chips
- Huang described the spending as the biggest infrastructure buildout ever, driven by strong monetizable demand
- All Nvidia GPUs sold in the past six years remain fully rented, demonstrating sustained AI computing demand
- CEO argues spending is sustainable because companies expect rising cash flows from AI-powered revenue growth
Nvidia stock rallied nearly 8% Friday after CEO Jensen Huang defended the tech industry’s massive AI spending on CNBC’s Halftime Report.
His comments came just as major customers reported earnings. Meta, Amazon, Google, and Microsoft all announced plans to increase AI infrastructure budgets dramatically.
The four hyperscalers could spend $660 billion combined on capital expenditures in 2026. A large portion will go directly to Nvidia for AI chips.
Huang dismissed concerns about sustainability. He called the current situation “the largest infrastructure buildout in human history.”
His logic is straightforward. Companies are investing heavily now because they expect bigger returns later.
“The reason for that is because all of these companies’ cash flows are going to start rising,” Huang said.
The market had mixed reactions to the spending announcements. Meta and Alphabet shares climbed. Amazon and Microsoft stocks fell.
Practical AI Use Cases Fuel Growth
Huang provided concrete examples of how companies are deploying AI today.
Meta is transitioning from CPU-based recommendation systems to generative AI and autonomous agents. Amazon Web Services leverages Nvidia chips to enhance product recommendations.
Microsoft uses the technology to improve its enterprise software offerings. These are active deployments generating revenue, not future promises.
Huang also praised AI companies OpenAI and Anthropic. Both use Nvidia chips through cloud providers. Nvidia invested $10 billion in Anthropic last year.
“Anthropic is making great money. Open AI is making great money,” he said. “If they could have twice as much compute, the revenues would go up four times as much.”
Older Chips Still in High Demand
One revealing detail stood out from Huang’s interview. Every GPU Nvidia has ever sold remains fully rented.
Even six-year-old A100 chips are completely utilized. This demonstrates the AI boom has real staying power beyond market hype.
“To the extent that people continue to pay for the AI and the AI companies are able to generate a profit from that, they’re going to keep on doubling, doubling, doubling, doubling,” Huang explained.
Huang pointed to “sky high” demand for computing power that companies can directly monetize. This demand justifies the unprecedented infrastructure investment happening across tech.
Wall Street analysts maintain a Strong Buy rating on Nvidia stock. Based on 37 Buys, one Hold, and one Sell from the past three months, consensus is bullish.
The average analyst price target reaches $260.06 per share. That represents 40.3% upside potential from current trading levels.
Huang’s defense targeted growing investor skepticism about AI spending levels. His message was clear: as long as AI generates profits, computing demand will keep accelerating.
