MARY LOUISE KELLY, HOST:
Chip company NVIDIA made more than $26 billion in the last three months, slightly beating expectations. Investors are still disappointed. Shares closed down less than 1% today. Well, that market reaction may tell a larger story about the ongoing AI frenzy. NPR financial correspondent Maria Aspan is here to explain. Hi, Maria. Nice to see you.
MARIA ASPAN, BYLINE: Hey. Nice to see you.
KELLY: So NVIDIA's business is wildly successful. Twenty-six billion in the last three months is not shabby. Why aren't investors happy?
ASPAN: I mean, it is a little ridiculous. NVIDIA is not only hugely profitable, it is the most valuable company in the world. And it got this way by selling the computer chips that are powering the artificial intelligence boom. But that's also why it's taken on this larger bellwether status. NVIDIA is now squarely at the center of so many bigger questions that businesses are wrestling with about spending on AI and the future of technology, and also about politics.
We've seen NVIDIA in the headlines a lot recently because earlier this month President Trump demanded a cut of NVIDIA's sales of a certain chip in China in exchange for letting the company do business there. Now, investors have kind of shrugged that off, even though it is an extraordinary arrangement from a political perspective. But NVIDIA and the larger artificial intelligence story are also super important for many reasons outside of politics.
KELLY: Yeah, and that's what I want to ask about. Like, what other reasons?
ASPAN: Well, it all comes down to the state of the AI bubble. NVIDIA reported earnings after a couple of weeks when we saw a lot of doubt being thrown on the current state of artificial intelligence and on the billions and billions of dollars that big companies are spending on it. And it's not just tech companies that are investing in AI. There's evidence now that a lot of companies playing with this technology haven't quite figured out how to make money from it. And there was, in particular, a survey that came out of MIT last week that found that 95% of organizations trying out AI aren't seeing any revenue from it.
KELLY: Wow.
ASPAN: That freaked out investors for days because does this just mean that companies are lighting money on fire? Gil Luria covers tech companies for D.A. Davidson.
GIL LURIA: Most companies are not getting the benefit, but they feel like they have to keep trying because of the magnitude of disruption that's coming their way.
ASPAN: But he is optimistic that AI spending will pay off in the long term, and so are a lot of investors.
KELLY: And what effect has this optimism that you're hearing, what's that having on the stock market more broadly?
ASPAN: I mean, tech companies are a huge part of the stock market. NVIDIA alone makes up about 8% of the S&P 500, and where it goes, the rest of the market follows. And until now, that's been great because tech has been this bright spot while investors are worried about President Trump's new tariffs and how they'll affect other parts of the economy. But investors start to sour on these tech companies and the AI bubble, then that's also really bad news for the broader markets and for everyone whose retirement and other savings are tied up in them.
KELLY: NPR's Maria Aspan, thank you.
ASPAN: Thank you. Transcript provided by NPR, Copyright NPR.
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