Nvidia's Jensen Huang on software stocks sell-off: 'the market's got it wrong'

Following a week that saw enterprise software giants like IBM and a bunch of cybersecurity firms endure their steepest declines in years, Nvidia’s chief executive Jensen Huang is stepping into the fray with a defiant message for Wall Street.

In recent weeks, investors have been spooked by the “disintermediation” narrative – growing fears that generative artificial intelligence (AI) could make conventional software platforms obsolete.  

However, Huang argues this panic is rooted in a fundamental “misunderstanding” of how AI works.

Instead of acting as a “SaaS-killer”, the industry expert believes we are about to enter an era where artificial intelligence agents become primary users of the very software that’s being sold off currently.

Why Huang believes software stocks sell-off is overdone

The core of Huang’s argument lies in the distinction between “doing work” and “replacing tools”.

In a CNBC interview after Nvidia reported a blockbuster Q4, the billionaire dubbed it a mistake to assume that because an AI can now write code or organize data, it will build its own infrastructure from scratch.

“I think the market’s got it wrong,” he noted, explaining that artificial intelligence agents are essentially “tool users”.

Just as a physical robot would read the manual to use a microwave – not invent one – digital agents will only leverage established platforms like SAP, Salesforce, and ServiceNow as well.

According to him, “agents won’t replace the tools”; they’ll just populate “systems of record” with greater speed and precision than humans ever could, likely increasing subscription load over time.   

Jensen Huang doesn’t see AI replacing humans either

On “Squawk Box Asia”, Jensen Huang also addressed the fear that AI could automate humans out of the loop, offering a nuanced perspective on the future of labour.

He likened a programmer’s coding to a CEO’s typing: both are necessary functions, but neither is the “purpose” of the job – the purpose is solving problems and driving innovation.  

“We’re going to need lots and lots of software engineers,” Huang explained, “but maybe they won’t have to code like they used to.”

By working at a higher “level of abstraction”, humans will describe their intentions to agentic AI, and that will handle the manual labour.

In short, the expected transition won’t eliminate humans or the software – it would simply change who or what is clicking the buttons and entering the data.

Why Huang’s view matters for investors

Jensen Huang’s perspective carries immense weight because Nvidia Corp sits at the “epicenter” of the artificial intelligence hardware revolution.

When the man providing the very “shovels” that power the AI gold rush says the “mines” (software firms) are safe, the market listens.

According to him, the “biological employees” of a company will soon be augmented by “hundreds of thousands of digital employees”, all of whom require software licenses to function.

If Huang is correct, the current software sell-off isn’t the beginning of the end for SaaS; it’s a huge mispricing of a future where software consumption scales exponentially.

For investors, the takeaway is clear: the tools aren’t dying – they are about to get much busier.

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