It's a short and flat ending! Nvidia's shareholder meeting failed to recover the decline in stock prices, what did Huang say?

Wall Street Sights

2024-06-27 03:12Wall Street News Official Account

The author of this article is Li Dan

Source: Hard AI

The concept of artificial intelligence (AI), which has been hot in the stock market this year, has been weakened, and the highly anticipated annual shareholder meeting has failed to reverse the decline in Nvidia's stock price.

On Wednesday, June 26, Eastern time, Nvidia's shareholder meeting lasted only about 30 minutes. In accordance with the schedule, shareholders voted to approve the compensation packages for all 12 nominees to Nvidia's board of directors, including CEO Jensen Huang, and agreed that PricewaterhouseCoopers will continue to be responsible for auditing Nvidia's financial results as the company's independent certified public accounting firm for fiscal 2025.

Under the compensation plan, Huang will receive approximately $34 million worth of compensation for fiscal year 2024, a 60% increase from fiscal year 2023. Nvidia executives' compensation is largely tied to performance. Previously, media estimates that about 78% of Huang's compensation was obtained through stock awards, so a sharp rise in Nvidia's stock price is equivalent to an increase in Huang's compensation.

Nvidia did not announce any new products at this conference, and no executive made any new product-related remarks. Judging from the stock price performance, investors had a mediocre response to the conference. During the meeting, Nvidia's stock price maintained a decline of more than 2%, retreating after a 6.8% rebound on Tuesday, and fell 2.8% after turning lower in early trading, and is set to close down for the fourth day in the last five trading days.

Wall Street Insight noted that before the conference, there were comments that Nvidia may not release any breakthrough results this time, but Huang and other Nvidia executives may take the opportunity to highlight Nvidia's achievements in the AI boom and show the company's long-term growth prospects. There are also comments that any relevant comments from Huang could be a driver of stock prices. Huang's comments about AI chips, which triggered a rally during Huang's recent trip to Asia, could boost sentiment and give investors the impression that Nvidia has not yet reached peak revenue.

During the meeting, although Huang attended and answered several shareholder questions, it did not seem to make a splash at first glance to stock market investors, but it was not without bright spots.

Huang is bullish on the prospects for the Blackwell platform, which was launched in March, saying:

"The Blackwell architecture platform is likely to be the most successful product in NVIDIA's history, and in the history of computing in general."

Some netizens commented that this is a major statement, because Nvidia is competing with Microsoft.

Some netizens said that this is why Huang sold his shares at the peak of Nvidia's stock price. But then some netizens explained that Huang Jenxun's sale of Nvidia shares was a previous plan, accounting for less than 1% of all the shares he holds.

Huang said Nvidia's strength in AI chips stems from a bet made more than a decade ago, investing billions of dollars in AI and investing thousands of engineers into it.

When asked about the competition it faces, Huang did not specifically name competitors, but instead laid out its overall strategy to stay ahead of the curve, first mentioning that the company has "transformed" from a game-focused company to a data center-focused company, and wants to open up new markets for the company's AI technology, such as industrial robots, and plans to work with all computer manufacturers and cloud service providers.

Huang said Nvidia's AI chips offer "the lowest total cost of ownership (TOC)." This means that while other chips may be cheaper, Nvidia's chips are more affordable for users considering performance and running costs.

Finally, Huang said Nvidia has achieved a "virtuous cycle." This means that when a platform has the most users, it can make the necessary improvements to attract more users. Huang said Nvidia's platform is more valuable to customers because it is widely available through all major cloud providers and computer vendors, creating a large and attractive installation base for developers and customers.

When asked by a shareholder about Nvidia's plans for quantum computing, Huang said he believes "practical quantum computing is still decades away" and that when it comes, "computing algorithms will be a combination of acceleration and quantum methods." ”

When asked by shareholders how Nvidia is dealing with a tight market environment for semiconductor manufacturing capacity, Huang replied that Nvidia "has the expertise and scale to develop resilient supply chains," and then added that Nvidia could enter into long-term supply agreements or pay upfront for manufacturing capacity to ensure customer demand is met.

NVIDIA's shareholder meeting coincided with the recent rally in AI concept stocks led by the company. Nvidia fell nearly 6.7% on Monday, the largest daily decline in two months, and fell nearly 13% in the three trading days as of Monday, less than a week after last week's brief one-day promotion to the global stock king, it fell into the adjustment range, and the total market value evaporated by $430 billion in three days, the largest three-day market value decline in the history of all individual stocks. Nvidia's stock price regained its market capitalization of $3 trillion on Tuesday, but returned to the decline on Wednesday.

Investors expect the AI industry and the chip industry to usher in a new catalyst. Nvidia's relatively quiet shareholder meeting on Wednesday failed to play that role, and now the market's attention has shifted to Micron's earnings report after hours on Wednesday.

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