Doubts on AI and Nvidia in an uncertain economy : NPR

The artificial intelligence bubble has supported the stock market and the wider economy for some time now. What happens if he bursts?

This was the question that bypasses Wall Street recently, because large technological companies are faced with both unprecedented political pressures of the White House – and new doubts about all the money dumped in AI investments.

Last week, AI Darling Nvidia reported successful financial results that beat analysts’ expectations. But investors were not impressed. The actions of the flea company have dropped by 4% within two days since this report.

Nvidia is always the most precious company in the world, and it alone represents about 8% of S&P 500. This real economic growth – by investing billions and billions of dollars in the development of artificial intelligence – and in the stock markets on which the Americans count for their retirement investments and other savings.

The S&P 500 is increasing by almost 10% and the NASDAQ, heavy with technology, has increased by more than 11% since the start of the year. This increase occurs despite the growing uncertainty of the performance of the broader American economy, the long -term effects of President Trump’s radical prices and the increased prices they should cause consumers.

The gold rush of AI is not yet bearing fruit

For companies and investors, the promise of artificial intelligence was a great economic bright point in the middle of all the other dead. In this modern gold rush, Nvidia and its competitors sell choices and shovels: semiconductors that many technological companies use to develop AI systems and capacities.

These companies, in turn, sell their AI products to all non-technical companies that prospect gold-that is to say, in search of means of making their operations cheaper or more effective.

But very few have seen results yet. The vast majority – 95% – companies that experience with AI see no turnover, according to a new investigation MIT. The publication of his conclusions last week sent the Nasdaq to a crisis of several days.

“Most companies do not benefit from it [of investing in artificial intelligence]But they feel like they are continuing to try due to the extent of the disturbances that arise, “said Gil Luria, who covers technological companies as DA Davidson Director.

What is happening with Nvidia symbolizes a wider story

Despite analysts’ expectations and carried out a practical benefit of $ 26.4 billion in its second quarter, Nvidia’s latest quarterly results disappointed Wall Street.

Even apart from the AI ​​bubble, Nvidia has become a link for the biggest problems with which American companies face – including growing concerns concerning the future of free market capitalism, and how much control Trump tries to practice on private companies.

Nvidia made the headlines this month for the extraordinary agreement that Trump announced with the company: he says that Nvidia has agreed to pay the US government a reduction in sales of a certain china, in exchange for letting the business do business there. (NVIDIA said this week that she had sold none of these china in China in the last quarter.)

Trump announced this agreement just before his administration said that it would take a 10% participation in Intel and that he plans to seek similar agreements in other industries. These extraordinary provisions have raised alarms in American companies on how the United States government exercises more control over the free markets. Meanwhile, investors are also waiting to see the full impact of Trump’s radical rates on the wider economy.

But Pam Hegarty, who invests in technological companies as head of the main portfolio at BNP Paribas, says that Wall Street seems to get used to political chaos around part of the artificial intelligence industry.

“Export prices and controls have certainly added a lot of uncertainty, especially for the semiconductor sector. But investors are starting to absorb this uncertainty,” she said, adding that it is always optimistic about the wider arrow of AI: “The overall opportunity is still there.”