Nvidia speaks, the stock market listens

On any typical day in the market where something in the grand ecosystem of the tech sector moves, your first question is usually something on the order of, “All right, did Nvidia do anything?”

Well, Monday evening Nvidia’s Jensen Huang gave a nice and revealing talk at CES, and then all of Tuesday the market acted in response. First let’s recap what was said.

Huang announced that its Vera Rubin chips are in full production. This is the new generation of AI GPUs for Nvidia, the successor to its Blackwell line, and the differences between Vera Rubin and Blackwell have industry-defining impacts.

For instance, God help you if you sell things that cool down chips. “The power of Vera Rubin is twice as high as Grace Blackwell,” Huang said, adding that it can be cooled by water at a temperature of 45 degrees Celsius, eliminating the need for water chillers at data centers.

Huang also unveiled Alpamayo, an open “reasoning” AI model family designed specifically for autonomous driving, and then announced that Nvidia is expanding its DRIVE Hyperion autonomous vehicle platform, touted as a ready-to-use foundation for self-driving cars and robotaxis, bringing in a wide range of auto suppliers and sensor makers.

What came next was expected: Nvidia speaks, and the market listens.

Data center water-cooling stocks sank, with Johnson Controls, Carrier, and Trane Technologies all taking a cold shower after Nvidia said the new AI racks won’t need their equipment.

Anyone with actual skin in the game on Vera Rubin made that known and were remunerated by the market accordingly, with Nebius (up 8%) reminding investors it’s deploying Vera Rubin in its cloud in H2 2026 and CoreWeave (up 1.4%) asserting that it expects “to be among the first cloud providers to deploy the NVIDIA Rubin platform.”

And perhaps biggest of all, there was a bonanza in data storage stocks after Huang called the market “completely unserved.” Sandisk finished up 28%, Western Digital up 17%, Micron up 10%, and Seagate Technology Holdings up 14%.

And Wall Street analysts ate it up. “NVDA has deftly positioned itself to benefit from multiple aspects of physical AI development — from data center compute (model training), to simulation (Omniverse) to edge devices (Jetson Thor) — which in aggregate could potentially drive the next leg of revenue growth for NVDA,” wrote JPMorgan analyst Harlan Sur.

The Takeaway

Wedbush Securities analyst Dan Ives perhaps encapsulated the vibe on the Street the best, saying Huang’s address “fully set the tone for the AI Revolution heading into 2026 as the company laid the path for the next stage of the AI Revolution: physical AI.”

In particular, “We walked out of the event feeling even more bullish about Nvidia and the overall AI Revolution as the next stage of investments and technology are on the horizon that can facilitate a new age for the technology world with companies around the world are set to capitalize on $3 trillion to $4 trillion of AI Cap Ex hitting the market over the next 3 years.”