Nvidia’s business results are positive, but investors are still worried about a “bubble” when billions of dollars, including debt, are still poured into AI.
In the third quarter, investors began to review the “hot” valuations of stocks related to artificial intelligence (AI) technology. According to filings with the US Securities Commission on November 14, billionaire Peter Thiel’s Thiel Macro investment fund sold all Nvidia shares held worth about 100 million USD.
Mr. Thiel Macro no longer holds Nvidia shares as of September 30. The main portfolio of Thiel Macro fund now shifts focus to Apple, Microsoft, Tesla. Previously, SoftBank also sold all Nvidia shares, earning $5.83 billion.
Chief Financial Officer Yoshimitsu Goto neither confirmed nor denied the risk of an AI bubble. But the moves of SoftBank and Thiel Macro make the market’s fear of this risk even clearer, especially when everywhere continuously announces plans to pump billions of dollars into AI infrastructure, including advanced chips and data centers.
Nvidia and OpenAI logo graphics. Image: Reuters
Tensions were eased last week, when Nvidia announced impressive business results. The American chipmaker recorded revenue for the third fiscal quarter (ending October 26). 57 billion USDup 62% over the same period in 2024, exceeding Wall Street’s expectations. Net profit increased by 65%, gross profit margin maintained a high level of 73.4%.
Nvidia forecasts current quarter revenue (from November to January 2026) to increase 65%, reaching $65 billion, thanks to cloud GPUs and the most advanced Blackwell chip line selling out. “There has been a lot of talk about the AI bubble and we have a very different perspective,” Nvidia CEO Jensen Huang said on Wednesday (November 19).
Nvidia’s forecast is based on strong chip demand from a series of technology giants such as Microsoft, Amazon, Alphabet and Meta Platforms. used to build data centers. Last month, Mr. Huang said the company had received $500 billion in chip orders for both 2025 and 2026.
Analyst Timothy Arcuri at UBS bank believes that Nvidia shares will continue to increase thanks to the above forecasts. He assessed that “the wave of investment in AI infrastructure is still rising”, so fast that all stocks related to this technology also increased in price.
Theo APNvidia’s new information helps calm fears of a collapse in the AI fever, which is the driving force behind the stock market this year. But analysts say that the “ghost” of the AI bubble could still return in the coming months and years.
The reason is because large technology companies (Big Tech) are preparing to spend trillions of dollars more on this technology. The race comes from the belief that AI will determine the winners and losers in the next wave of innovation.
Gartner’s recent report predicts that the world will spend more than 2,000 billion USD on AI by 2026, an increase of 37% compared to the estimated scale of nearly 1,500 billion USD this year. “Spending on AI is not only holding steady but accelerating,” said Jake Behan, director of capital markets at investment firm Direxion.
It’s unclear whether all the money poured into AI will actually generate the profits and productivity that the technology’s proponents promise. That raises the question of whether all the spending being poured is worth it. Bank of America’s survey of global fund managers found that a record proportion of investors believe companies are “overinvesting” in AI.
Recently, Nvidia and Microsoft announced a commitment to pour $10 billion into AI software provider Anthropic. Normally, news of such a major cooperation would help the stock prices of the parties involved increase. But neither Nvidia nor Microsoft responded positively to the Anthropic announcement.
Deutsche Bank analysts say this is a sign that investors are increasingly cautious. “Cross-investment deals in the AI field are being more cautious, as discussions about the possibility of an AI bubble are increasing,” the analysis team assessed.
Some companies like Meta Platforms and Oracle are relying heavily on debt to fund their AI ambitions. This strategy has investors worried, reflected in the stock price falling more sharply than peers in recent weeks.
Shares of Meta and Oracle are both down more than 20% since the end of October. According to SPI Asset Management expert Stephen Innes, the market is still in a state of oscillation between AI excitement and fears of a debt-driven correction.
Other Big Tech is so profitable that it can use cash to continue pouring into AI. Behind Nvidia and Apple, the ranking of the largest capitalized companies on the planet are also names that are enthusiastically investing in AI, including Alphabet, Microsoft and Amazon. The market value of this trio currently ranges from 2,300 to 3,600 billion USD.
Chris Zaccarelli, Chief Investment Officer of asset management company Northlight Asset Management, admitted that valuations of AI-related companies are high and the market is showing signs of a bubble. However, this spending on technology is also real. “It will take many years to know whether spending is excessive or not,” he assessed.