The AI scare trade has rattled markets recently, sending software stocks tumbling and sparking concern from investors that some companies won't survive. According to one of AI's most prominent CEOs, they're all overreacting.
Nvidia chief executive Jensen Huang recently addressed the software selloff following his company's earnings on Wednesday, revealing why he thinks the panic in response to recent AI news is largely overblown. Despite the sell-off, thinks the industry will ultimately benefit from the rise of agentic AI technology.
"I think the markets got it wrong," he said on CNBC following Nvidia's fourth-quarter earnings smash. "I think it's very likely that these companies that we're talking about are going to introduce agents that run on their platforms."
One example that Huang cited is ServiceNow. The software producer has been one of the AI scare trade's victims, falling more than 20% over the past month. But in his view, the company is in prime position to bounce back as it implements AI agents to enhance its operations and streamline productivity.
Huang also used his own company to illustrate his point, highlighting the key role that he expects AI agents to continue playing in Nvidia's future.
"I have 42,000 biological employees and I'm going to have hundreds of thousands of digital employees and together we're going to use a lot more tools," he said.
The Nvidia CEO made it clear that he sees a future in which AI agents continue writing code and creating software for companies that are benefitting from strong demand.
That may call to mind images of a workforce without human workers but it doesn't mean the need for the human labor will be eliminated Huang argued.
"The purpose of the work won't change," Huang predicted. "We're going to need lots and lots of software engineers, but maybe they just don't have to code like they used to code. They'll code in a new way."
Huang isn't the only one to speculate that software stocks can continue to rise despite AI fears. Deutsche Bank analysts recently shared a note on Anthropic, stating that they don't see the technology as a replacement for current systems.
Despite crushing estimates for revenue and guidance, the market's reaction has been tepid, showcasing the depths of investors' AI fatigue. The stock was down as much as 5% on Thursday.
