Nvidia gets vocal as rivals close the gap. That isn’t always a good sign.
Nvidia has found itself in the unusual position of having to launch a charm offensive as its status as the world’s most valuable stock comes under increasing pressure from one of its biggest rivals in artificial intelligence.
“We are pleased with Google’s success,” Nvidia said in a statement shared with a wide range of media outlets, including Barron’s, following Alphabet’s launch of its Gemini 3 chatbot.. The company later published the same statements on its verified social media account.
Google, which develops its own AI chips known as Tensor Processing Units, is also reportedly in talks to sell them to Meta Platforms, Facebook’s parent company, for its Llama AI infrastructure.
But Nvidia isn’t done. “They have made great advances in artificial intelligence, and we continue to supply Google,” the statement continued, before shifting from professional congratulations to self-promotion.
“Nvidia is a generation ahead of the industry [and] “It’s the only platform that runs every AI model and does it wherever computing is done,” the company said, before touting the superior performance, versatility and “modifiability” of its AI systems.
Nvidia also privately disputed Big Short investor Michael Burry’s allegations of aggressive accounting practices. When the company reported third-quarter earnings last week, management cited “off-the-charts” sales of Blackwell chips.
The demand is absolutely amazing. CEO Jensen Huang told investors that demand for Blackwell processors and the upcoming Rubin chip will reach $500 billion by the end of next year. And there’s a chance we’ll hear hints of a more powerful, more efficient, and possibly more profitable version of Nvidia’s rack and server system at the company’s next developers conference in March.
But in terms of both the AI investment cycle and Nvidia’s place at the top of it, this boast seems to belie a larger concern than the company is likely to admit. Tech investors have been skeptical of similar claims by other players in big tech.
Palantir CEO Alex Karp told investors on Nov. 7 that his company’s third-quarter earnings were “probably the best results any software company has ever delivered.” It didn’t, and the stock fell 20% this week before embarking on a modest recovery.
Not to be outdone, Tesla CEO Elon Musk, fresh off his victory in a Nov. 6 shareholder vote that predicted he would make $1 trillion from the stock over the next 10 years, announced that the company was starting “not just a new chapter, but a whole new book in Tesla’s future.” Since then, the stock is down almost 10%.
Strategy’s Michael Saylor, whose shares have fallen 54% in the past six months, said at a Yahoo Finance event on Nov. 15 that there’s “no doubt in my mind” that Bitcoin will be bigger than gold over the next decade. The strategy did not buy any Bitcoin last week despite the digital currency’s 12% decline. The strategy’s stock market cap is currently trading below the value of its Bitcoin holdings.
Nvidia is still the world’s largest stock, and it’s still at the epicenter of the world’s biggest technological revolution. It has added more than $3 trillion in market value over the past two years and has directly contributed to the growth boom that has kept the US economy from falling into recession.
The company will likely generate $93 billion in free cash flow this year, with a balance sheet comfortable enough to buy back $50 billion in stock if it chooses, according to Gimme Credit’s Dave Novosel.
In other words, Nvidia isn’t going away anytime soon. But maybe for the first time in years there will be someone.
Write to Martin Baccardax at martin.baccardax@barrons.com
