Jensen Huang's Next Move Could Trigger AI Supply Shock Panic, Analyst Warns

In a recent analysis, RSM Chief Economist Joe Brusuelas warned that the next announcement from NVIDIA (NVDA) CEO Jensen Huang could trigger a panic in the AI market due to an unexpected supply shock.

The Unpriced Supply Shock

Brusuelas argues that most bear cases for AI focus on circular financing between hyperscalers and model builders, overly optimistic earnings expectations, or valuation resets on high-multiple stocks. However, he believes a different factor is at play: a supply-side shock that Wall Street has not yet priced in.

Analyst's Logic

Brusuelas suggests that Huang could announce a sudden development in AI chip production or a new technology that disrupts the current supply chain, leading to a severe shortage and higher chip prices. This scenario, he says, could cause panic as investors scramble to reassess their positions.

Context

Brusuelas did not specify the nature of the potential announcement, but emphasized that the market currently prices no supply disruption. The warning comes as NVIDIA continues to dominate the AI chip market, with strong revenue growth expectations.

What to Make of It

The warning remains theoretical at this stage, but it highlights the fragility of the AI supply chain and the market's dependence on NVIDIA's announcements. Investors should monitor any statements from Huang regarding production capacity or new technologies.