* . *
  • About
  • Advertise
  • Privacy & Policy
  • Contact
Monday, September 8, 2025
Earth-News
  • Home
  • Business
  • Entertainment
    The Secret to What Made ‘CarJack’ Work on As the World Turns – yahoo.com

    The Surprising Secret Behind ‘CarJack’s’ Success on As the World Turns

    Victor Garber on his viral “And Just Like That” toilet scene: ‘I was delighted to be doing something ridiculous’ (exclusive) – yahoo.com

    Victor Garber on his viral “And Just Like That” toilet scene: ‘I was delighted to be doing something ridiculous’ (exclusive) – yahoo.com

    Pendulum Announce Homecoming 2026 Australian Tour – yahoo.com

    Pendulum Announces Thrilling Homecoming Tour Across Australia in 2026

    ITV Studios Launches New Entertainment Label – Global Bulletin – IMDb

    ITV Studios Unveils Exciting New Entertainment Label

    TS Entertainment bringing Malibu Jack’s to former Owensboro mall – Lane Report

    TS Entertainment Launches Malibu Jack’s at Former Owensboro Mall Location

    Jenny Han Dropped a Major ‘The Summer I Turned Pretty’ Easter Egg Revealing [SPOILER] – yahoo.com

    Jenny Han Just Unveiled a Huge ‘The Summer I Turned Pretty’ Easter Egg That Changes Everything [SPOILER]

  • General
  • Health
  • News

    Cracking the Code: Why China’s Economic Challenges Aren’t Shaking Markets, Unlike America’s” – Bloomberg

    Trump’s Narrow Window to Spread the Truth About Harris

    Trump’s Narrow Window to Spread the Truth About Harris

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Trending Tags

    • Trump Inauguration
    • United Stated
    • White House
    • Market Stories
    • Election Results
  • Science
  • Sports
  • Technology
    Industry partner provides Ferris State Plastics Engineering Technology students with state-of-the-art equipment to gain in-demand skills – Ferris State University

    Industry Partner Equips Ferris State Plastics Engineering Students with Cutting-Edge Technology to Boost In-Demand Skills

    Health Technology Ecosystem – Centers for Medicare & Medicaid Services | CMS (.gov)

    Discover the Future of Health Technology: Innovations Revolutionizing Patient Care

    Coherent Joins LLNL’s STARFIRE Diode Technology Working Group to Advance Inertial Fusion Energy – GlobeNewswire

    Coherent Partners with LLNL’s STARFIRE Team to Drive Breakthroughs in Inertial Fusion Energy

    Gene Associated With Deadly Heart Disease in Golden Retrievers Identified – Technology Networks

    Breakthrough Discovery Uncovers Gene Behind Deadly Heart Disease in Golden Retrievers

    Monkey Island LNG Picks ConocoPhillips’ Liquefaction Technology – Hart Energy

    Monkey Island LNG Selects ConocoPhillips’ Advanced Liquefaction Technology for Next-Gen Energy Solutions

    Credo Technology Group Holding Ltd. (CRDO) Surpasses Q1 Earnings and Revenue Estimates – Yahoo Finance

    Credo Technology Group Surpasses Q1 Earnings and Revenue Expectations

    Trending Tags

    • Nintendo Switch
    • CES 2017
    • Playstation 4 Pro
    • Mark Zuckerberg
No Result
View All Result
  • Home
  • Business
  • Entertainment
    The Secret to What Made ‘CarJack’ Work on As the World Turns – yahoo.com

    The Surprising Secret Behind ‘CarJack’s’ Success on As the World Turns

    Victor Garber on his viral “And Just Like That” toilet scene: ‘I was delighted to be doing something ridiculous’ (exclusive) – yahoo.com

    Victor Garber on his viral “And Just Like That” toilet scene: ‘I was delighted to be doing something ridiculous’ (exclusive) – yahoo.com

    Pendulum Announce Homecoming 2026 Australian Tour – yahoo.com

    Pendulum Announces Thrilling Homecoming Tour Across Australia in 2026

    ITV Studios Launches New Entertainment Label – Global Bulletin – IMDb

    ITV Studios Unveils Exciting New Entertainment Label

    TS Entertainment bringing Malibu Jack’s to former Owensboro mall – Lane Report

    TS Entertainment Launches Malibu Jack’s at Former Owensboro Mall Location

    Jenny Han Dropped a Major ‘The Summer I Turned Pretty’ Easter Egg Revealing [SPOILER] – yahoo.com

    Jenny Han Just Unveiled a Huge ‘The Summer I Turned Pretty’ Easter Egg That Changes Everything [SPOILER]

  • General
  • Health
  • News

    Cracking the Code: Why China’s Economic Challenges Aren’t Shaking Markets, Unlike America’s” – Bloomberg

    Trump’s Narrow Window to Spread the Truth About Harris

    Trump’s Narrow Window to Spread the Truth About Harris

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Trending Tags

    • Trump Inauguration
    • United Stated
    • White House
    • Market Stories
    • Election Results
  • Science
  • Sports
  • Technology
    Industry partner provides Ferris State Plastics Engineering Technology students with state-of-the-art equipment to gain in-demand skills – Ferris State University

    Industry Partner Equips Ferris State Plastics Engineering Students with Cutting-Edge Technology to Boost In-Demand Skills

    Health Technology Ecosystem – Centers for Medicare & Medicaid Services | CMS (.gov)

    Discover the Future of Health Technology: Innovations Revolutionizing Patient Care

    Coherent Joins LLNL’s STARFIRE Diode Technology Working Group to Advance Inertial Fusion Energy – GlobeNewswire

    Coherent Partners with LLNL’s STARFIRE Team to Drive Breakthroughs in Inertial Fusion Energy

    Gene Associated With Deadly Heart Disease in Golden Retrievers Identified – Technology Networks

    Breakthrough Discovery Uncovers Gene Behind Deadly Heart Disease in Golden Retrievers

    Monkey Island LNG Picks ConocoPhillips’ Liquefaction Technology – Hart Energy

    Monkey Island LNG Selects ConocoPhillips’ Advanced Liquefaction Technology for Next-Gen Energy Solutions

    Credo Technology Group Holding Ltd. (CRDO) Surpasses Q1 Earnings and Revenue Estimates – Yahoo Finance

    Credo Technology Group Surpasses Q1 Earnings and Revenue Expectations

    Trending Tags

    • Nintendo Switch
    • CES 2017
    • Playstation 4 Pro
    • Mark Zuckerberg
No Result
View All Result
Earth-News
No Result
View All Result
Home Business

$1.7 trillion chip giant Nvidia just gained over $100 billion in value after a blowout quarter, but this mega-bearish analyst says the tech industry is in an AI bubble

February 22, 2024
in Business
$1.7 trillion chip giant Nvidia just gained over $100 billion in value after a blowout quarter, but this mega-bearish analyst says the tech industry is in an AI bubble
Share on FacebookShare on Twitter

Investors have long had a love affair with U.S. tech stocks from the boom cycle of the late ‘90s and early 2000s that famously ended with the dotcom crash, to the AI-induced heights of Nvidia’s current stock rally. Love affairs, though, often end badly, and this one could leave investors nursing both an aching wallet and a broken heart. Artificial intelligence has officially thrust the U.S. tech industry into a bubble and Silicon Valley could be on the precipice of another crash, according to an analyst note from BCA Research chief strategist Dhaval Joshi. 

“We are in an AI bubble,” Joshi tells Fortune. “We’ve been wowed by some of the results.” 

Few stocks embodied that wow factor like the $1.7 trillion AI chip giant Nvidia, which reported earnings on Wednesday, blowing analyst expectations out of the water. The chipmaker—dubbed “the most important stock on planet earth,” by a Goldman Sachs analyst—reported revenues of $22.1 billion during the last quarter, compared to a forecast of $20.6 billion. Revenues for the company’s data center chips, used in AI models and generative AI applications, reflected increased demand and reached $18.4 billion, up 27% from the third quarter and 409% compared to last year. Stock prices rose 7% in post-market trading, adding over $100 billion of value. 

“Accelerated computing and generative AI have hit the tipping point,” said Nvidia founder and chief executive Jensen Huang in a press release. “Demand is surging worldwide across companies, industries and nations.”

While Joshi didn’t comment on Nvidia specifically, its outstanding results can be seen as evidence for his case. 

The tech sector is trading at a 75% premium to the global stock market, according to Joshi’s calculations in an analyst note published last week. Its scorching-hot growth became the backbone on which much of the rest of the U.S. stock market’s growth was built and drove the Nasdaq to near record highs last year, just 6.5% off its all-time high in November 2021. In 2023, the so-called Magnificent Seven, which comprise Nvidia, Apple, Microsoft, Alphabet, Meta, Amazon, and Tesla, contributed two thirds of the S&P 500’s total market gains. 

And while those gains are impressive and remunerative for savvy investors, they’re unsustainable, according to Joshi. 

Unlike Nvidia, some companies won’t be able to live up to the lofty expectations the market sets. That could spell trouble because valuations and stock prices are often measured against expectations as much as they are actual results. If the major tech companies that make up much of the sector’s (and the economy’s) growth miss out on analyst expectations they could drag others down with them. While he cautions against underestimating AI as a whole, Joshi believes the market is pricing in far too much productivity growth from the new technology. And when new innovations fail to live up to those expectations the market will punish the companies that made them.  

“Because these handful of stocks have become such a massive percentage of the market cap, any disappointment there is mathematically going to have an impact on the overall index,” Joshi says. 

In order for the U.S. tech sector to avoid bubble territory, it would have to continue trading at a 10% premium to the market—a scenario which Joshi sees as unlikely. 

Joshi doesn’t blame the market for valuing tech companies so highly. In fact, they’ve proven their worth over the last 10 years by achieving stellar results time and time again. In the last decade the stocks of premier tech firms have soared. For example, since February 2014 Nvidia’s stock has risen 14,927%, Microsoft’s 964%, and Apple’s 875%. The numbers pale in comparison to the still-robust 163% the S&P 500 returned over the last 10 years. Even though he doesn’t believe it will continue, he says it is rational for the market to keep pricing in more explosive growth in tech. 

“If you get very strong earnings growth, for one or two years, the market thinks of it the other way: ‘This can’t be sustained.’ So if anything, you give it a low valuation, because you say these are abnormally high earnings. But if the market sees 10 years of outstanding performance it no longer considers those results abnormal, coming to expect them in perpetuity, Joshi says. 

For Joshi, though, the last 10 years of blockbuster earnings growth were, in fact, abnormal. In large part because the bulk of that growth was a result of the network effect, which allowed a select few firms to balloon in size and effectively gain control of a market. Amazon captured the market for online shopping, Google did the same for search, and Meta cornered the market in online communication, Joshi writes in his note. 

“Once you have networks, you have winners and losers,” he says. “Those winners become natural monopolies, and if you’re a natural monopoly, then you’re in a very strong position to grow your profits.”

Without a clear indication that the network effect will translate to the world of AI, those companies won’t have the same dominant position, Joshi argues. “The market is saying, ‘hey the baton is going to be passed on now to generative AI and that will continue the trend for the next five to 10 years.’ I’m very cynical about that because there is no network effect in generative AI.” 

There is the possibility that some especially popular AI tools could see a network effect if they attract more users because they’ll be able to train themselves on all the tasks they get asked to perform. 

Even without AI it seems like the benefits of the network effect could be reduced in the near future because of a push from elected officials to regulate Big Tech. “The Web 2.0 revolution has reached its limit because of consumer backlash and much harder, tougher regulation about what data you can collect and how you can use it.”  

In Europe, the EU already passed several landmark pieces of legislation meant to break up some of the power tech giants like Apple and Alphabet already had on the market. While in the U.S. despite there being no national privacy law there is an unprecedented level of bipartisan and public support for a series of new laws that would limit the amount and type of data that tech companies can collect on users.  

But despite the hurdles Joshi sees on the horizon for tech, he doesn’t anticipate the whole sector will come crashing down as it did in the dotcom bust. In fact, it will continue to outpace the overall market just at a slower pace. That could still mean tough losses for investors, especially as the market eventually readjusts for a tech sector that no longer delivers hundredfold returns.  

To be sure, whether or not the market is in the midst of an AI bubble is still hotly debated. Joshi isn’t alone in thinking there is one. Morgan Stanley cautioned against racing headfirst into AI, lest investors not have an adequate lay of the land before the bubble bursts. Meanwhile Goldman Sachs and others argue that soaring returns aren’t a bubble, just the market rewarding the future of technology. 

As for what investors should do to mitigate the risks of a possible AI bubble, Joshi has some simple advice: invest in other parts of the market like healthcare and luxury goods. 

Subscribe to the Eye on AI newsletter to stay abreast of how AI is shaping the future of business. Sign up for free.

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : Fortune – https://fortune.com/2024/02/21/1-7-trillion-chip-giant-nvidia-earnings-report-ai-bubble-market-crash-dotcom-bust/

Tags: businessgianttrillion
Previous Post

‘Space junk’ unicorn backed by Japanese billionaire wants to clear the skies for Elon Musk and Jeff Bezos

Next Post

AI-Linked Crypto Tokens Surge After Nvidia Sees ‘Tipping Point’

Six Acclaimed Artists Interpret Ecology and the Landscape for ‘Ground/work 2025’ – thisiscolossal.com

Six Acclaimed Artists Interpret Ecology and the Landscape for ‘Ground/work 2025’ – thisiscolossal.com

September 7, 2025
This Stanford computer science professor went to written exams 2 years ago because of AI. He says his students insisted on it – Fortune

Stanford Professor Returns to Written Exams After Students Demand It Amid AI Rise

September 7, 2025
Tiny thumbnails may be key for rodents’ global takeover – Science News

How Tiny Thumbnails Helped Rodents Conquer the Globe

September 7, 2025
$9 Million Stock & Warrant Deal: American Trust Leads Furniture Maker Nova LifeStyle’s Strategic Offering – Stock Titan

American Trust Fuels Nova LifeStyle’s Growth with $9 Million Stock and Warrant Investment

September 7, 2025
Industry partner provides Ferris State Plastics Engineering Technology students with state-of-the-art equipment to gain in-demand skills – Ferris State University

Industry Partner Equips Ferris State Plastics Engineering Students with Cutting-Edge Technology to Boost In-Demand Skills

September 7, 2025
Former NFL All-Pro RB has top girls basketball prospect – Yahoo Sports

Former NFL All-Pro RB has top girls basketball prospect – Yahoo Sports

September 7, 2025
Pope Leo appeals for peace in Holy Land, Ukraine, areas of world marred by war – Vatican News

Pope Leo appeals for peace in Holy Land, Ukraine, areas of world marred by war – Vatican News

September 7, 2025
The US Economy Is at a Turning Point—and the Stakes Are Higher Than You Might Think – Morningstar

The US Economy Stands at a Crucial Crossroads-Here’s Why It Matters Now More Than Ever

September 7, 2025
The Secret to What Made ‘CarJack’ Work on As the World Turns – yahoo.com

The Surprising Secret Behind ‘CarJack’s’ Success on As the World Turns

September 7, 2025
Fighting a health insurance denial? Here are 7 tips to help – Los Angeles Times

7 Powerful Strategies to Beat Health Insurance Denials and Secure the Coverage You Deserve

September 7, 2025

Categories

Archives

September 2025
MTWTFSS
1234567
891011121314
15161718192021
22232425262728
2930 
« Aug    
Earth-News.info

The Earth News is an independent English-language daily published Website from all around the World News

Browse by Category

  • Business (20,132)
  • Ecology (812)
  • Economy (829)
  • Entertainment (21,707)
  • General (16,910)
  • Health (9,871)
  • Lifestyle (843)
  • News (22,149)
  • People (832)
  • Politics (836)
  • Science (16,040)
  • Sports (21,329)
  • Technology (15,810)
  • World (811)

Recent News

Six Acclaimed Artists Interpret Ecology and the Landscape for ‘Ground/work 2025’ – thisiscolossal.com

Six Acclaimed Artists Interpret Ecology and the Landscape for ‘Ground/work 2025’ – thisiscolossal.com

September 7, 2025
This Stanford computer science professor went to written exams 2 years ago because of AI. He says his students insisted on it – Fortune

Stanford Professor Returns to Written Exams After Students Demand It Amid AI Rise

September 7, 2025
  • About
  • Advertise
  • Privacy & Policy
  • Contact

© 2023 earth-news.info

No Result
View All Result

© 2023 earth-news.info

No Result
View All Result

© 2023 earth-news.info

Go to mobile version