Uneasiness Over A.I. Spending Looms Over Markets

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.

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.

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.

Nvidia's investors reacted negatively to the company's strong earnings report, leading to a selloff despite the positive financial results. This occurred as broader market sentiment shifted towards expectations of a potential Federal Reserve rate cut, causing a disconnect between Nvidia's performance and investor behavior.

Global stock markets, including Wall Street and Asian exchanges, faced significant declines this week as investors expressed concerns over a potential artificial intelligence bubble and inflation uncertainties. Major indices, such as the S&P 500, experienced their worst performance in months, prompting fears of a broader market downturn.

Dan Ives analyzes Nvidia's impressive quarterly earnings, highlighting the reasons behind the stock's recent sell-off and what Wall Street may be overlooking regarding the future of the AI industry. Despite strong financial results, investor reactions suggest a disconnect between performance and market expectations.