By R. Scott Raynovich
Publication Date: 2025-11-20 21:19:00
A stunning reversal in technology stocks following Nvidia’s stellar earnings report on November 19 shows that anxiety about an AI bubble is growing.
Nvidia shares were initially up after a seemingly spectacular earnings report that included raised revenue guidance for the next quarter. But then things turned south: A massive reversal in markets turned Nvidia shares red. Other leading AI plays, such as Microsoft and Oracle, also headed south. At one point, Nvidia shares were up 5% the day after the earnings report, but they were quickly trading down 3% in late morning, a swing of 7% to the downside in a matter of hours. They closed at $18.64, down $5.88 (3%) on the day.
The market reaction shows that investors are increasingly questioning the risks in the AI infrastructure buildout, which has included projected spending of more than a trillion dollars in the next few years, much of it guided by OpenAI, a private company that is bleeding cash.
Nvidia’s Numbers Beat the Street
First, let’s look at the numbers. Nvidia exceeded Wall St. expectations, posting revenues of $57 billion, up 62% year-over-year (y/y) for the third quarter of its fiscal year 2026. Of that, datacenter revenue accounted for $51.2 billion, up 55% y/y, boosted by Blackwell adoption and sales of Spectrum-X networking gear (up 162%).
The non-GAAP gross margin of 73.6% is also impressive, delivering adjusted net income of $32 billion. More importantly, its guidance for $65 billion in sales next quarter…