What happened?
On the day Nvidia reported a record second-quarter revenue of $96.2 billion, chief executive Jensen Huang told analysts that one of his favourite pastimes is tracking who he dines with around the world. He quipped that the share price of his dinner companions often "doubles the next day".
"One of the funnest things to do is just to go figure out where I go for dinner, and who I have dinner with," Huang said. "Their stock price doubles the next day."
The comment came in response to a Goldman Sachs analyst asking Huang to rank the most acute constraints on Nvidia's ability to meet soaring demand. While the chipmaker projected a 70 % revenue growth for the next fiscal year, far above the 44 % consensus estimate, Huang and chief financial officer Colette Kress warned that supply chain bottlenecks remain.
Why does it matter?
Huang's remark highlights the outsized influence of Nvidia's ecosystem of suppliers, partners and rivals. Recent dinners have included the chairmen of South Korea's SK Group and LG, Oracle founder Larry Ellison and SpaceX chief Elon Musk, as well as the late TSMC founder Morris Chang. In each case, news of the meeting has been followed by sharp moves in the related companies' shares.
For example, when reports emerged that LG's chairman Koo Kwang-mo would meet Huang, LG's stock rose about 30 % and its affiliates gained between 17 % and 29 %. A similar "halo effect" was observed after Huang dined with Samsung Electronics chairman Jay Y Lee and Hyundai Motor executive chair Chung Euisun, lifting the shares of poultry processor Cherrybro and fried-chicken specialist Kyochon F&B.
What happens next?
Huang said Nvidia is working to make its supply chain as transparent as possible while new capacity comes online in small increments. He did not disclose his dinner plans for the evening, leaving investors to watch for the next headline that could trigger another stock surge.
"There's something funny I could say, but I'm going to just not," Huang added. "I think the answer is our entire supply chain is challenged, and everybody is really running flat out and more capacity is coming online all the time, which is one of the advantages."
Analysts will continue to monitor how Nvidia's networking strategy intersects with its ambitious growth targets, especially as the company seeks to meet demand that already exceeds its current 70 % supply coverage.