NVIDIA Corporation

NASDAQ Global Select
Back to all articles
Somewhat Bearish -25

AGI is here, Nvidia CEO Jensen Huang has declared. Here’s why the market doesn’t care - Fortune

AI-generated analysis

📉 Nvidia stock fell 2% after CEO Jensen Huang declared AGI had arrived, contradicting the bullish reaction seen in OpenAI-linked competitors like CoreWeave and SoftBank.

💰 Analysts describe Nvidia as 'too big to grow' given its record $96 billion quarterly revenue, causing traders to view it as a funding source for rivals rather than a primary AI beneficiary.

🧠 Experts argue that OpenAI's Astra model has not met rigorous definitions of AGI regarding cognitive versatility, requiring human supervision for complex tasks like migrating music playlists.

📈 Real interest rates have climbed significantly since 2021 due to hyperscaler capex rather than AI singularity, challenging the narrative that AI will immediately drive massive economic expansion.

📉 Historical data indicates Treasury yields often fall slightly around major model releases, suggesting financial markets are generally disappointed by the current pace of AI development.

🤖 Economist Basil Halperin forecasts a 'dot-com boom' style growth over the next five years but explicitly states that a true singularity has not yet occurred.

Risk Factors
  • Nvidia stock declined 2% following Jensen Huang's AGI declaration, indicating the market does not believe the announcement represents new value or that AGI has already been priced in.
  • The article notes that Nvidia is currently viewed by traders more as a source of funds to buy competitors like CoreWeave rather than a stock to buy based on new AI model releases.
Full Analysis
Nvidia CEO Jensen Huang declared that Artificial General Intelligence (AGI) has arrived following the release of OpenAI's new model, Astra, which was trained on 100,000 Grace Blackwell chips. Despite this high-profile announcement and praise from figures like Jim Cramer, Nvidia's stock price fell 2% in Tuesday trading, marking a divergence between Huang's claims and immediate market reaction. This follows a similar pattern where previous AGI declarations by Huang resulted in negligible or negative stock movements. Analysts suggest that Nvidia is already priced as a dominant market player with massive revenue growth, making it difficult for the stock to react positively to incremental AI milestones. D.A. Davidson's Gil Luria noted that while companies leveraged to OpenAI like SoftBank and CoreWeave saw gains, Nvidia is viewed more as a funding source for competitors rather than a primary beneficiary of every new model release. The market appears to have already incorporated the implications of recent AI advancements into Nvidia's valuation. Economist Basil Halperin argues that true AGI has not been achieved under standard cognitive versatility definitions and warns that transformative AI might eventually impact interest rates in ways that could theoretically lower stock valuations. He points out that real interest rates have risen significantly since 2021, driven by hyperscaler capital expenditure rather than a singularity event. Furthermore, historical data shows Treasury yields often fall slightly around major model releases, suggesting the market has been consistently disappointed by the pace of AI progress relative to hype. The article concludes that while AI is expected to add to GDP growth, the magnitude is currently viewed as modest by both researchers and investors rather than transformative in the short term. Halperin forecasts a period of rapid but non-singular growth over the next five years, aligning with market sentiment that Nvidia's current trajectory does not yet reflect a paradigm shift capable of driving significant new stock appreciation.