Top strategist: Nvidia CEO Jensen Huang’s affair highlights key risk for tech companies
- NVDA
- ^GSPC
Add national security risk to the outlook for the S&P 500 (^GSPC), in addition to a potential slowdown of the AI data center build-out.
That risk has been brought to the forefront amid the stunning debacle unfolding at Nvidia (NVDA) and with its high-profile founder and CEO, Jensen Huang.
“I think the news on Nvidia highlights that national security is critically important for these tech companies, and government involvement might even be more aggressive from here than less aggressive,” Bank of America head of US equity and quantitative strategy Savita Subramanian said on Sozzi Unleashed.
“So I think it’s a really interesting time,” Subramanian added. “I think you want to stay along [with] the idea that AI is not the metaverse … It’s not just going to end. But the speed of capex might be stretched out a little bit rather than happening over the next two years.”
Nvidia’s board of directors has launched an independent investigation into reports that a woman CEO Jensen Huang had an affair with was allegedly a spy for the Chinese government.
Huang admitted to the affair on Sunday in an email to employees.
(NVDA)
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Nvidia stock fell 4.27% on Monday as a dark cloud settled over Nvidia and its once-Teflon CEO’s future. Shares fell another 6% in afternoon trading on Tuesday.
“We’ve seen the government involved in semis historically. We saw a 10% stake in Intel from the US Treasury. So we’ve seen this support mechanism come through,” Subramanian said. “I think that it’s paramount for the US to remain No. 1 in terms of tech primacy. And that’s where I see almost a put on the tech story from here.”
“I don’t think it ends. I don’t think it gets derailed by a blue sweep. I think there’s bipartisan support to remain No. 1 when it comes to tech,” she added. “But I do think that issues over the last week, the cost of capital rising onerously for these companies that are trying to build out capacity, some of those aspects might be more scrutinized.”
Follow Brian Sozzi on X@BrianSozzi,Instagram, andLinkedIn. Tips on stories? Email him at brian.sozzi@yahoofinance.com.
