Why Nvidia is being punished for delivering a blockbuster earnings report

US stocks experienced a notable increase driven by expectations of a potential interest rate cut by the Federal Reserve. However, despite this boost, the market lost ground over the week, reflecting ongoing concerns about economic conditions and investor sentiment.

The U.S. government is considering allowing Nvidia to sell its H200 chips to China, according to sources. This potential decision comes amid ongoing scrutiny of semiconductor sales to China, particularly in light of national security concerns. The H200 chips are significant for AI applications, and their sale could have implications for U.S.-China relations in the tech sector.

Federal Reserve official John Williams has reignited discussions around potential interest rate cuts, suggesting that a reduction may be on the table for December. His comments have raised questions about the Federal Reserve's internal divisions regarding monetary policy, particularly as some policymakers remain opposed to such cuts. This uncertainty reflects ongoing debates within the Fed about the appropriate response to current economic conditions.

Nvidia CEO Jensen Huang expressed concerns about the company's position amid discussions of an AI bubble, stating that the market did not recognize the company's strong quarterly performance. Huang's comments were revealed in a leaked meeting, highlighting the challenges Nvidia faces despite its recent successes.

Investors are expressing concerns that the artificial intelligence (AI) sector may be experiencing a bubble, particularly affecting stocks associated with OpenAI, SoftBank, and Oracle. Despite strong earnings from Nvidia and the successful launch of Alphabet's Gemini 3 Pro AI model, stocks related to OpenAI are declining. This trend indicates a selective market reaction within the tech industry, raising questions about the sustainability of AI investments.

The Score is a weekly review highlighting significant stock movements and the news influencing them. This week, notable stocks include Nvidia, Constellation, Eli Lilly, and Gap, with Nvidia's performance particularly impacting market sentiment.

Lovable, a Swedish AI coding startup, has doubled its annual revenue to $200 million in just four months. The company is focusing on enhancing its product features to better serve enterprise customers, as stated by CEO Anton Osika.

Nvidia reported strong earnings, projecting sales of approximately $65 billion for the January quarter, surpassing analysts' expectations. Despite this positive outlook, shares fell as concerns about a potential AI bubble persisted among investors. The company's performance remains a focal point in discussions about the sustainability of AI investments.