Khaberni - Nvidia's electronic chip manufacturing shares fell by more than 5% in the latest trading session amid investor fears of a bubble in the artificial intelligence sector after tech companies have poured massive investments into it over the past two years.
The American company announced good quarterly results but they were not enough to alleviate concerns on Wall Street in New York regarding the company’s expected revenue in the upcoming period.
As a result of Nvidia's share price decline, the Nasdaq technology stocks index dropped by 1.2% yesterday, Thursday, as reported by the British newspaper "Financial Times," while the broader Standard & Poors 500 index declined by 0.5%.
It is worth noting that Nvidia successfully raised its market value to exceed 5 trillion dollars over the past year.
Investor Concerns
American network "CNBC" quoted Janus Henderson's portfolio manager Richard Clode as saying, "The discussion has shifted from short-term results to the potential for continued capital spending on artificial intelligence amidst concerns about its scale, ability to generate income, and possible deterioration in its cash flows."
The company's results for the last quarter of the previous year, which were released after the market closed on Wednesday, showed good earnings, but a state of anxiety spread among investors because the company's conference call only provided limited details about revenue expectations.
Mike Ziegmund, co-head of trading at Wisdom Investment Group, told the Financial Times that "the market may have realized that the big growth phase of artificial intelligence investments has ended, and there will not be attractive returns on these investments as in the past two years, which is why investors started withdrawing."
The newspaper explained that Nvidia's earnings for the last quarter of 2025 were not sufficient to counteract "multiple sources of uncertainty," according to the newspaper's description, including heavy spending on technology, concerns about the impact of artificial intelligence, and broader geopolitical disturbances affecting U.S. stocks.
Huge Investments
Portfolio manager at Ninety One, Dan Hanbury, clarified that "what concerns investors is how Nvidia can maintain its high growth rate if its core customers, cloud computing companies, are spending most of their money on investments related to artificial intelligence."
It is noted that Nvidia is close to completing a deal to invest about 30 billion dollars in the artificial intelligence company "Open AI," which owns the site "ChatGPT," instead of a previous commitment to a broader partnership between the two companies worth 100 billion dollars.
In September last year, Nvidia and Open AI signed a "letter of intent" including the partnership agreement worth 100 billion dollars, but the deal has not progressed from a memorandum of understanding to an official agreement, as the "Wall Street Journal" reported in January this year that this deal "has been frozen."
