Wall Street Lunch: AI Regulation Hopes Fade After Trump Calls AI Concerns A 'Hoax'

Prospects for tighter AI regulation have declined after President Trump dismissed AI-takeover concerns in a public call with Nvidia CEO Jensen Huang, a modest positive for AI-exposed companies. Separately, RBC Capital Markets upgraded ResMed to Outperform and raised its price target to $262, citing strong Q4 performance and expectations for high-single-digit EPS growth.

Analysis

The near-term implication for NVDA is less about incremental revenue than a reduction in the regulatory-discount rate embedded in AI infrastructure valuations. A softer federal posture could extend the useful life of unrestricted model-training demand and reduce the probability of near-term compliance-driven capex delays at hyperscalers, benefiting NVDA alongside higher-beta compute suppliers such as AVGO, ANET and VRT. The second-order risk is that reduced federal urgency shifts regulation to states and foreign jurisdictions, creating a fragmented compliance regime that still constrains enterprise deployment over 6-18 months.

RMD's setup is more idiosyncratic: sustained earnings execution can support multiple expansion only if growth is demonstrably volume-led rather than dependent on pricing or temporary operating leverage. The more important 1-3 month catalyst is whether management's forward commentary confirms durable sleep-apnea device demand and preserves gross-margin trajectory; that would differentiate RMD from slower-growth medtech peers and make the upgrade cycle self-reinforcing. A renewed GLP-1-driven concern around sleep-apnea treatment substitution remains the key contrarian overhang, but it is a longer-duration demand-elasticity question rather than an immediate quarterly earnings risk.

Consensus may overestimate the investability of the AI-policy signal. Federal rhetoric can improve sentiment within days, but NVDA's absolute return still depends more on hyperscaler capex guidance, export-control implementation and supply availability than on generalized regulatory headlines. Conversely, RMD may offer a cleaner risk-adjusted earnings revision path if upcoming data validate growth, since its thesis is less exposed to broad AI multiple volatility.

Key Decisions for Investors

• Maintain NVDA as a tactical 1-3 month long only against a defined catalyst calendar of hyperscaler earnings and AI capex guidance; add on evidence of upward capex revisions rather than on policy headlines alone. Falsify if major cloud customers signal training-capex digestion or if new export-control restrictions materially narrow addressable demand.
• Express the regulatory-risk compression through a pair trade: long NVDA / short a broad semiconductor proxy such as SOXX in modest size over 30-60 days. This isolates NVDA's AI-platform exposure, but exit if NVDA underperforms SOXX following the next hyperscaler reporting cycle, indicating demand—not regulation—is driving relative fundamentals.
• Initiate or add to RMD on confirmation that forward EPS expectations are rising after the next results or investor update; target a 6-12 month holding period rather than chasing the analyst-price-target reaction. Risk is a guidance reset tied to procedure volumes, margin pressure, or evidence that GLP-1 adoption is reducing new-patient flow; those developments would invalidate the earnings-revision thesis.
• Avoid using long-dated NVDA calls solely to monetize lower regulatory odds: implied volatility and valuation leave poor asymmetry without a quantified earnings catalyst. Reassess if the stock consolidates while consensus revenue estimates continue rising, which would create a more favorable entry point.