As the AI infrastructure boom faces a test of investor confidence, NVIDIA (NASDAQ: NVDA) CEO Jensen Huang publicly endorsed the outlook for AI, urging the market to focus on long-term fundamentals.
Speaking to Bloomberg in Berlin on Thursday, Huang said the current market turmoil "will eventually pass" because AI technology is transformative and will have a positive impact on every industry and every country. He stressed that this process is still at its starting point and will not be changed by short-term fluctuations.
His comments came as the Philadelphia Semiconductor Index fell for an eighth consecutive trading session, the longest losing streak since 2008, with NVIDIA (NASDAQ: NVDA) shares also declining in seven of the past eight trading days.
Market Turmoil Cannot Shake AI Fundamentals
CoreWeave, a flagship company in AI infrastructure buildout, bore the brunt this week, with its shares plunging more than a quarter in a single week, while its corporate bonds also fell to levels that typically signal financial distress. NVIDIA (NASDAQ: NVDA) is one of CoreWeave's major shareholders.
Huang maintained an optimistic stance on the current market environment in the interview. "Some of the headlines are certainly noisy," he said. "News happens every day, but that doesn't change the fundamentals."
He expects that large-scale corporate investment in AI hardware will ultimately generate considerable returns, gradually dispelling market unease. In his view, the sustainability concerns about AI spending that investors currently worry about will be resolved as the value of the technology is realized.
Huang has repeatedly urged investors to look beyond short-term reports and focus on the long-term value of the technology. "Go back to first principles, focus on the fundamentals," he emphasized again in the interview.
Chip Stocks Under Pressure, CoreWeave Hit Hard
The sell-off has affected the entire chip and AI infrastructure sector. The Philadelphia Semiconductor Index has fallen for eight consecutive trading sessions, the longest decline since the 2008 financial crisis; NVIDIA (NASDAQ: NVDA) shares closed lower in seven of the past eight trading days.
The pressure has been concentrated on cloud computing service provider CoreWeave. The company's shares fell by a quarter this week, and its corporate bonds also dropped to price levels typically seen by the market as distress signals. NVIDIA (NASDAQ: NVDA), as one of CoreWeave's important backers, holds a stake in the company.
The background to this market correction is that investors are questioning whether AI spending can be sustained in an environment of persistently high borrowing costs, and are becoming increasingly cautious about the profit path of related companies.
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