Quick Read
- Nvidia is set to report Q3 fiscal 2026 earnings on November 19, with analysts expecting $1.25 EPS and $54.9 billion revenue.
- AI bubble concerns have intensified, with 45% of fund managers now viewing it as the biggest market risk (Bank of America).
- Major investors like SoftBank and Peter Thiel have recently sold Nvidia shares, though hedge funds overall increased their positions in Q3.
- Nvidia stock is down over 7% for the month but up nearly 42% in 2025; broader markets have also retreated ahead of earnings.
- Investors are watching data center growth, China sales, profit margins, and future guidance for signs of sustained momentum.
Nvidia Prepares for Earnings Amid Market Turbulence
The anticipation is palpable on Wall Street as Nvidia (NVDA), the chipmaker synonymous with the AI revolution, prepares to unveil its fiscal 2026 third-quarter earnings after the market closes on November 19. This isn’t just another quarterly update—it’s a litmus test for the resilience of the AI-fueled market rally and Nvidia’s role as its bellwether.
Analysts expect Nvidia to report earnings of $1.25 per share, a 54% jump year over year, on revenue of $54.9 billion, up more than 56%. These projections underscore the snowballing demand for AI infrastructure, especially as tech giants ramp up capital expenditures in pursuit of ever-larger data centers. Yet, the optimism is tempered by rising concerns that the sector may be approaching bubble territory, with some of the industry’s most prominent voices sounding alarms.
AI Bubble Fears Cast a Shadow Over Nvidia’s Big Moment
It’s not just market volatility that has investors on edge. According to a recent Bank of America survey, 45% of fund managers now cite an AI bubble as the biggest tail risk to markets, up sharply from last month. This sentiment is echoed by leaders like Alphabet CEO Sundar Pichai, who warns of “elements of irrationality” in the current surge, and Palantir Technologies’ Alex Karp, who cautions that the economic output may lag the massive infrastructure costs.
Mohamed El-Erian, economist and former CEO of PIMCO, frames the moment as a “rational bubble,” arguing that the potential payoff of AI justifies outsized investments—even if some are bound to fall short. But the stakes remain high: if Nvidia’s report disappoints, it could reinforce the narrative that the AI boom has run too far, too fast.
Major Investors Shift Positions as Nvidia’s Influence Grows
Adding to the intrigue, some of tech’s most influential investors have recently exited Nvidia positions. SoftBank’s Masayoshi Son sold his remaining stake for $5.8 billion, and Peter Thiel’s hedge fund, Thiel Macro LLC, liquidated its Nvidia holdings—moves that, while small compared to Nvidia’s massive market cap, signal a willingness among big players to seek opportunities beyond the chipmaker.
Yet, hedge funds as a group were net buyers of Nvidia in the third quarter, with share ownership rising by 4.6 million. The stock itself has delivered stellar returns—an initial $1,000 investment in Nvidia twenty years ago would be worth over $670,000 today, dwarfing the S&P 500’s $7,900 from the same starting amount (Kiplinger).
Market Volatility and Macro Risks Surround Earnings Week
Heading into earnings, the broader equities market has stumbled. The Dow Jones Industrial Average recently endured its worst three-day stretch since April, while the Nasdaq and S&P 500 marked consecutive declines. Nvidia shares have retreated more than 7% for the month, though they remain up nearly 42% since January. The pullback comes as investors digest warnings about overinvestment in AI, slowing job growth, and a cautious Federal Reserve stance on interest rates.
“The key to a turnaround in the situation will be Nvidia’s earnings this Wednesday,” says Louis Navellier of Navellier & Associates. He notes that major investors exiting positions have “put a chill on the shares,” but strong results and guidance from CEO Jensen Huang could “re-energize the entire market.”
What Will Investors Be Watching?
Stephen Callahan, trading analyst at Firstrade Securities, highlights several metrics that could shape investor sentiment: data center revenue, guidance for future demand, China sales, profit margins, and supply chain stability. Nvidia’s Blackwell chips, in particular, are expected to drive robust growth, supported by long-term contracts with major clients. However, U.S.-China trade tensions and regulatory risks remain a potential minefield.
BofA Securities analyst Vivek Arya has raised his earnings-per-share estimates for Nvidia, projecting $4.56 per share for fiscal 2026 and reiterating a Buy rating with a $275 price target—nearly 50% above current levels. Arya points to Nvidia’s execution in large AI clusters and argues that cloud capex worries are seasonal, likely easing as the new year begins.
Is the AI Boom Sustainable?
For all the bubble talk, some market participants believe the concerns are exaggerated. Neil Azous, portfolio manager at Strategy Shares, notes that historical dips in Nvidia stock have often led to outsized gains. “Betting against the most important company in the world… has generally been a losing trade,” he says. Brian Stutland, of the Rational Equity Armor Fund, argues that Nvidia’s forward price-to-earnings ratio of 31 is reasonable, especially given its growth trajectory.
Still, the sector’s volatility is undeniable. Microsoft and Amazon both fell nearly 4% after analysts downgraded the stocks, arguing that AI investments are being priced too optimistically relative to their actual returns. Even Bitcoin, often seen as a bellwether for speculative sentiment, briefly dipped below $90,000 for the first time in seven months, erasing its gains for the year (Yahoo Finance).
Dividend, Buybacks, and Capital Allocation
Nvidia pays a modest quarterly dividend—just 1 cent per share, amounting to a 0.02% yield, far below the S&P 500’s 1.2%. Yet, the company has been aggressive in returning capital to shareholders, distributing $834 billion in dividends and repurchasing $33.7 billion in stock during fiscal 2025. These moves reflect confidence in its long-term outlook and cash generation.
The Road Ahead: Can Nvidia Reignite the AI Flame?
With sentiment at its most cautious in several quarters, Nvidia’s earnings could be the catalyst that reignites market enthusiasm or confirms deeper worries about the sustainability of the AI rally. CEO Jensen Huang has flagged $500 billion in orders for Blackwell and Rubin chips, suggesting material upside if demand remains strong.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, believes that Nvidia’s underlying business “remains strong,” with third-quarter revenue likely to hit the top end of guidance. Investors, though, will be keenly focused on fourth-quarter forecasts and any hints about 2026, especially as China sales remain challenged and macro headwinds persist.
In sum, Nvidia’s upcoming earnings report is more than a financial update—it’s a real-time referendum on the durability of the AI boom. The outcome could either restore confidence or deepen market unease, making this a pivotal moment for both Nvidia and the broader tech sector.