Nvidia posted another blockbuster earnings report this month, extending its run as the defining winner of the AI boom. Yet the stock slipped, reflecting a growing unease among investors who worry that the tech sector may be drifting into an AI bubble reminiscent of the dot-com era.
Skeptics point to massive infrastructure spending, circular partnerships among major players, and lofty promises of world-changing AI with little immediate profit to show for it. With ten tech giants—including Nvidia, Amazon, Meta, Oracle, Alphabet, and Microsoft—now making up roughly 40% of the S&P 500, the stakes are high. The last time market concentration reached such levels, the dot-com crash erased more than 75% of the Nasdaq’s value.
But some analysts say the fear is overstated. Wedbush’s Dan Ives argued that Nvidia’s results are “another validation point for the AI revolution,” placing the market in “the top of the third inning.” JP Morgan’s Bob Michele echoed the sentiment, saying today’s AI leaders already have viable business models—unlike many early internet firms.
Venture capitalists also point to real demand. Lightspeed Venture Partners’ Ravi Mhatre told CNN that revenue growth in this cycle is “exponentially greater” than past tech waves, with rapid model advances driving new consumer and enterprise use cases, from cloud workloads to tools like ChatGPT’s shopping assistant.
Still, even bullish investors acknowledge the hype. “We’re in a momentum cycle,” Mhatre said, “but the value creation is also real—and happening faster than ever.”
