As we discussed yesterday, Jensen Huang delivered some big news on stage at Nvidia’s developers conference in DC — and it may have cleared the way for a melt up in stocks.

Why?

Let’s revisit this chart we looked at after Nvidia reported in earnings back in August.

Despite that, around those earnings the stock could only manage a choppy 11% pullback from all-time highs.

And now the top has been blown off.

What changed?

From what Jensen said on stage yesterday, the data center growth rate for Nvidia is about to rebound sharply.

That signal from the most important company in the world is a greenlight for markets and for the acceleration of the tech revolution.

Add to that, we heard from three of the tech giants today on earnings.

As you likely know, the “AI bubble” talk has been hot and heavy in the media, but it remains (quarter after quarter) hard to find things not to like with the tech giants.

The blended Google (Alphabet), Meta and Microsoft would be a rule of 57 company (average 18% revenue growth + 39% operating margin), trading at 32x earnings (ttm).

Together they’re deploying aggregate capex of $69 billion a quarter (which only widens the competitive moats) and still producing aggregate free cash flow of $61 billion.  Even if they were lighting the capex dollars on fire every quarter, the valuations still wouldn’t be stretched.

So, we have this reset on the Nvidia outlook, and what looks like a new leg of “melt up” in stocks — and then the Fed comes in today, cutting rates into it.

With that, not too surprisingly, Jerome Powell did his best to try to counter the market excitement.

In his prepared remarks, he said “a further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it.”  Then he said it again, in what looked like a planted first question from Nick Timiraos, the Fed-cozy WSJ reporter.

Powell followed with “there’s a growing chorus now … feeling like this is where we should at least wait a cycle…”

Bottom line:  The Fed can talk tough, but with a rebound in Nvidia growth coming and with the cash machine tech giants continuing to self-fund the AI build-out, the melt-up scenario looks likely — if no shakeup from the Trump–Xi meeting.