Jensen Huang’s 8-word bombshell that every Nvidia investor needs to hear; here’s why it’s a game-changer

During Nvidia’s recent earnings call, CEO Jensen Huang dropped powerful eight words that could have a major impact on the future of the company and its investors: “Future reasoning models can consume much more compute,” as quoted by The Motley Fool.

Nvidia’s demand to rise

These words, in response to concerns raised about the open-source release of Chinese AI DeepSeek's R1 model, immediately turned heads. Rather than signalling a decrease in demand for Nvidia’s industry-leading AI chips, Huang claimed that the evolution of AI models will only increase the need for Nvidia’s processors, as per the report.

Jensen Huang praises DeepSeek

He also publicly acknowledged the R1 model for the first time and said that it has "ignited global enthusiasm," as per The Motley Fool. Huang also praised DeepSeek for "an excellent innovation," the report added.


The CEO also mentioned that it is important to note that Deepseek "has open-sourced a world-class reasoning AI model," quoted The Motley Fool.

Nvidia's glimpse into the future

Nvidia is gearing up for continued success, with management projecting record-breaking growth, as per the report. The company is expecting first-quarter revenue to hit $43 billion, a 65% increase compared to last year, reported The Motley Fool. This outpaces Wall Street’s estimate of around $42 billion, according to the report.

According to The Motley Fool, investors must keep in mind McKinsey & Company's estimates that the generative AI market could bring an economic impact of anywhere from $2.6 trillion to $4.4 trillion in the coming years. As the leader in AI chips, Nvidia is in a prime position to capture a significant share of that growth, as per the report.

Attractive investment

Even though Nvidia has experienced rapid growth over the last few years, its stock is still relatively attractively priced. Trading at roughly 28 times next year’s expected earnings, it’s slightly above average, but still a good value considering the company’s potential for more than 50% growth in both revenue and earnings per share by fiscal 2026, reported The Motley Fool. With AI demand continuing to soar, Nvidia's future seems bright. Investor Danny Vena recommends that "Nvidia stock is a buy," as per the report.

FAQs

What did Jensen Huang say?
Jensen Huang mentioned that "Future reasoning models can consume much more compute," which suggests that the growing evolution of AI will drive even more demand for Nvidia’s processors.

What did Huang say about the DeepSeek R1 model?
Huang praised the DeepSeek R1 model, calling it an "excellent innovation" that has "ignited global enthusiasm" while acknowledging its open sourcing of a world-class AI reasoning model.