Nvidia’s Stellar Quarter Fails to Quell Bears as AI Valuation Fears Deepen on Wall Street – Decrypt

vm_admin
Nvidia’s Stellar Quarter Fails to Quell Bears as AI Valuation Fears Deepen on Wall Street – Decrypt

By Decrypt / Josh Quittner
Publication Date: 2025-11-21 17:54:00

In brief

  • Nvidia’s blowout earnings couldn’t overcome investor anxiety about sky-high AI valuations, triggering a sector-wide sell-off.
  • Fund managers rotated out of tech and into defensive sectors like healthcare, the month’s strongest performer.
  • Pure-play AI software firms such as C3.ai were hit hardest, underscoring doubts about business models without established cash flows.

Wall Street’s conviction in the long-term potential of artificial intelligence faced its sternest test this week, and the markets delivered a complex, yet clear, message: high valuation anxieties trump fundamental strength.

Despite Nvidia Corp. reporting blockbuster fiscal third-quarter earnings that easily surpassed consensus estimates, the market’s reaction demonstrated that valuation concerns and uncertainty about the sustainability of the AI boom continue to hold investor sentiment firmly in bearish territory.

The chipmaker, whose graphics processing units are the essential bedrock of the current AI revolution, reported revenue of $57 billion late Wednesday, exceeding expectations and issuing similarly robust guidance for the current period, projecting fourth-quarter sales of $65 billion. The results, fueled by seemingly insatiable demand from hyperscalers like Google parent Alphabet and Microsoft, should have ignited a sector-wide rally.

Instead, the surge proved short-lived.

Nvidia’s stock, which initially jumped in after-hours trading and opened sharply higher on Thursday, rapidly…

Related Posts