Nvidia erased its post-earnings stock rally on Thursday, as fears of AI overvaluation crept back up.
The US chipmaker’s blockbuster report Wednesday temporarily calmed investors jittery about an AI bubble, but analysts said the strong demand for its AI processors doesn’t address questions about the payoff from Big Tech’s spending boom on data centers. Nvidia earnings aren’t “a reliable gauge of whether AI economics are truly maturing across the industry,” one Singapore-based expert said, suggesting a better barometer is the adoption and monetization of AI services that are being sold to businesses.
“It’s easy to see how this ends badly,” one economist argued, but this may be a bubble that “takes our economy to a fundamentally better place.”
