What Nvidia's Earnings Signal About the AI Investment Cycle

Mark Zandi argues that Nvidia's earnings show the AI investment cycle is a juggernaut and critical to US growth, contributing at least a fourth of roughly 2% GDP growth. He says AI has so far boosted demand, CapEx, and stock prices but has not yet shown up in productivity. The key risk for markets is whether productivity gains emerge soon enough to justify AI and tech stock valuations. - Nvidia earnings reinforce the AI investment cycle as a juggernaut. - AI accounts for at least a fourth of roughly 2% US GDP growth. - Without AI, Zandi estimates GDP growth would be closer to 1.5%. - AI demand-side strength shows up in investment spending, CapEx, and stock prices. - Productivity gains from AI have not yet appeared meaningfully. - AI/tech companies are about 10% of GDP but roughly 50% of S&P 500 market cap and two-thirds of stock gains since ChatGPT. - Zandi watches for productivity growth to rise toward 2.25%-2.5% to support valuations.