Nvidia Beat Validates AI Buildout as Non-Zero-Sum
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- Nvidia posted better-than-expected fiscal Q2 results with a fourth straight quarter of accelerating revenue growth and a strong outlook, prompting a price target hike to $280 from $260.
- Amazon committed to purchasing 2 million additional Nvidia GPUs in 2027 and 2028 despite developing its own AI chips, with CEO Jensen Huang noting that "return on investment capital is now less than a year."
- Salesforce CEO Marc Benioff dismissed "SaaSpocalypse" fears as "nonsense," noting nine of the 10 leading AI companies use Salesforce with spending up 435% year-over-year, and unveiled "Claudeforce" integrating Anthropic's Claude.
- CrowdStrike reported 26% revenue growth as AI-powered attacks drive demand for stronger defenses; more than 100 companies and entities signed a letter urging stronger cybersecurity in the AI era.
- Nvidia finance chief Colette Kress said current-quarter growth will be primarily driven by non-hyperscaler customers including neoclouds CoreWeave and Nebius, signaling demand is broadening beyond the largest cloud providers.
- Meta agreed to an $18 billion settlement with 48 state attorneys general over claims social media harms young users; shares ended the week up 5% after briefly dipping on the announcement.
- The Nasdaq gained 0.9%, S&P 500 added 0.5%, and Dow rose 0.5% for the week, with most gains coming Thursday; Fed Chair Kevin Warsh's hawkish Jackson Hole remarks pushed September rate-hike odds to 55% per CME FedWatch.
Why it matters: This week dismantled the year's dominant AI fears: Salesforce spending by AI companies is up 435% YoY with the stock +22%, CrowdStrike revenue rose 26% as AI-powered attacks drive demand, and Nvidia's growth is now led by non-hyperscaler neoclouds. Even Fed Chair Warsh's hawkish Jackson Hole remarks pushing September rate-hike odds to 55% couldn't derail the rally.
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