NVIDIA: Big Tech and the new era of AI

NVIDIA’s highly anticipated quarterly report has once again put the spotlight on the tech sector and its central role in the global economy. Commenting on its significance on Class CNBC’s Caffè Affari was Edoardo Narduzzi, CEO and Founder of Mashfrog Group. It was an opportunity to interpret exceptional figures, but also to reflect on the sustainability of the market’s current wave of enthusiasm.

The AI highway and engine of the economic cycle

According to Narduzzi, the results presented by the company led by Jensen Huang leave no room for doubt. "Everything is positive: NVIDIA has sent a very clear and very strong signal to the market."
The company, explains the Mashfrog CEO, has become the benchmark player of the artificial intelligence economic cycle — a sort of foundational infrastructure supporting global digital transformation. "NVIDIA manages the infrastructure of AI; it’s like the operator of the artificial intelligence highway," he states.
Most of its revenues now come from the Hypercloud Data Center segment, the new infrastructures designed to sustain the massive volume of data powering the intelligent services that are set to reshape both business and everyday life.

Record-breaking numbers and growing outlook

The most striking figure is the company’s ability to keep raising the bar.
"By increasing its guidance and targets for the current quarter, NVIDIA is signaling that investments in technology remain strong, with no signs of slowing."
The quarter posted a net profit of $32 billion — a "very strong and very positive" result that confirms the solidity of an ecosystem in which NVIDIA sits at the center of an unprecedented network of cross-investments in the history of the market.

On the valuation front, Narduzzi’s comment leaves little to the imagination: "We’re on another planet. NVIDIA saw its market value surge by more than $232 billion in a single day. Today it’s worth more than $5.5 trillion."
These numbers make clear the company’s extraordinary ability to influence global markets — far more than any other high-tech manufacturing company.

Even more surprising are the operating margins, consistently above 70%: "It has entered a new production dimension. Imagine a manufacturing company with margins above 70% — it has never happened before."
 

NVIDIA, Big Tech, and the contemporary economy

Analyzing the effect of NVIDIA’s quarterly results on Big Tech, Narduzzi highlights a key point: not all tech companies are growing at the same pace. The real common thread is the cloud business, which represents the most dynamic component in the financials of players like Amazon, Microsoft, and Oracle.

"The cloud is the most important business in terms of growth and EBITDA contribution, and it’s a business that buys from NVIDIA the infrastructure needed to build new data centers." In other words, the growth of digital giants is directly tied to NVIDIA’s ability to supply the advanced chips and systems essential for developing AI solutions demanded by companies across every industry.

NVIDIA’s quarterly report was likely the most anticipated in recent history.
"The NVIDIA press release is more important than the one from the Fed or the White House," Narduzzi says, summarizing with a quip the company’s systemic impact. The reason is simple: today, the most strategic investments in global capitalism converge on artificial intelligence — and NVIDIA is its technological cornerstone.

Is this euphoria here to stay?

When looking ahead, however, the Mashfrog CEO maintains a balanced approach. While acknowledging the exceptional nature of the results, he cautions against assuming that this level of growth can continue indefinitely.

"Can NVIDIA keep pushing the reality check on AI investments further and further into the future? I don’t know. In 12 or 18 months it could be worth 7 trillion… or less than it is today."
What is certain is the extraordinary ability of its founder, Jensen Huang, to steer a business trajectory that is always one step ahead of market expectations:
"Every quarter he beats the consensus estimates — and his own estimates."

A success that doesn’t concern only tech investors: “We’re all tied to it — even our pensions — to NVIDIA’s ability to reassure the markets and sustain such high valuations."