TLDR
- Nvidia stock jumped nearly 8% Friday as CEO Jensen Huang defended massive AI infrastructure spending on CNBC
- Tech giants Meta, Amazon, Google, and Microsoft could invest $660 billion in AI capex during 2026
- Huang pointed to real customer deployments and rising cash flows as justification for the spending levels
- All Nvidia chips ever manufactured, even six-year-old A100 models, remain fully utilized and rented
- Wall Street analysts hold Strong Buy rating with $260.06 average price target showing 40.3% upside
Nvidia shares rallied nearly 8% Friday following CEO Jensen Huang’s passionate defense of the tech industry’s AI spending boom.
Huang spoke on CNBC’s Halftime Report just as major customers wrapped up earnings season. The reports revealed dramatic increases in planned AI infrastructure budgets.
Four hyperscalers—Meta, Amazon, Google, and Microsoft—could spend a combined $660 billion on capital expenditures this year. Much of that investment targets AI infrastructure powered by Nvidia chips.
Wall Street showed mixed reactions to the spending announcements. Meta and Alphabet saw stock gains. Amazon and Microsoft faced declines.
Huang rejected sustainability concerns outright. He characterized the spending as unprecedented in human history.
The CEO described it as “the largest infrastructure buildout in human history.” He attributed it to exceptional demand for computing power that drives direct monetization.
Rising Returns Justify Current Investments
Huang’s confidence rests on expected financial returns. Companies are spending aggressively now because they anticipate much higher future earnings.
“The reason for that is because all of these companies’ cash flows are going to start rising,” Huang stated.
He provided real-world deployment examples to support his case. Meta is transitioning from older CPU-based recommendation engines to generative AI and autonomous agents.
Amazon Web Services uses Nvidia-powered AI to refine product recommendation algorithms. Microsoft integrates the technology across its enterprise software suite.
These applications are live and generating revenue today, not theoretical future use cases.
Huang also praised leading AI labs OpenAI and Anthropic. Both companies operate on Nvidia chips accessed through cloud infrastructure. Nvidia invested $10 billion in Anthropic in 2025.
“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.”
Complete GPU Utilization Proves Demand
One striking detail emerged during Huang’s interview. Every GPU Nvidia has ever sold remains in active commercial use.
Even A100 chips released six years ago are fully rented out to customers. This demonstrates genuine sustained demand rather than speculative 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.
He emphasized “sky high” demand for computing power that companies can directly convert into revenue. This validates the unprecedented spending levels across the industry.
Analysts maintain overwhelmingly positive sentiment. The consensus rating stands at Strong Buy based on 37 Buy ratings, one Hold, and one Sell assigned in the past three months.
The average analyst price target reaches $260.06 per share. This represents 40.3% upside potential from current trading prices.
Huang’s comments directly addressed mounting investor skepticism about AI spending sustainability. His position remained clear: as long as AI generates profits, computing demand will continue accelerating rapidly.
