Nvidia's earnings report Wednesday could offer clues for investors watching the AI boom

Investors are eyeing Nvidia on Wednesday, when the company will report its summer profits in a closely watched test of whether cracks are emerging in the AI boom.

Critics have warned of potential drops in AI stocks after prices rose sharply since April, and some have expressed concern about a speculative bubble as investors pour money into a technology with yet-to-be-tested profit margins.

Nvidia’s earnings call on Wednesday is like “the Super Bowl for not just tech investors, but investors around the world,” said Dan Ives, global head of tech research at Wedbush Securities, a wealth management, brokerage and advisory firm. “There’s fears of a bubble; we believe those are not warranted."

Nvidia is the “poster child for the AI Revolution,” he said, predicting that the company will be the prime beneficiary of investment in the field over the next five years.

AI bubble fears persist

Shares of the California-based company have doubled in price in four of the last five years. While prices are still up nearly 40% for the year, Nvidia stock fell 2.8% on Tuesday, following swings in eight of the last 10 days, AP has reported.

The company is in good financial health, with $57 billion in cash and investments as of July 2025 and $8.5 billion in long-term debt, according to Morningstar, a financial services and research company.

Nvidia has been a “major force in driving the overall market and AI trade over the past two years,” said Melissa Otto, head of research at S&P Global Visible Alpha, a market intelligence company. “The market is keen to see if Nvidia can maintain its momentum, especially since their revenue guidance aligns with expectations but lacks any boost from China.”

“There’s a worry about overbuilding and overinvestment, as the market debates the long-term growth potential,” Otto said. “While Nvidia's innovations are impressive, the question remains whether they can sustain growth without contributing to bubble fears.”

A September report from management consulting firm Bain & Co. predicts that in 2030, AI companies will fall around $800 billion short of the $2 trillion in combined annual revenue needed to fund the computing power required to meet estimated demand.

And despite companies collectively investing tens of billions into GenAI, 95% have not seen a return, according to a July report from researchers at the Massachusetts Institute of Technology. The researchers attributed this to limited meaningful structural change and implementation strategies, among other factors.

With AP and Tribune News Service

By Brianne Ledda

brianne.ledda@newsday.com@brianne_ledda

Brianne Ledda covers personal finance and affordability for Newsday. She previously covered Southold and Greenport for The Suffolk Times and is a graduate of Stony Brook University.