Blowout earnings from Nvidia for the third quarter of fiscal 2026 have reignited a fierce debate on whether the artificial intelligence (AI) industry is in the middle of a speculative bubble.
The semiconductor giant’s latest financial report reveals its astonishing revenue and profit growth, but these numbers come amid growing concerns about the sustainability of the AI investment frenzy that has gripped Wall Street and Silicon Valley alike.
In the company’s blowout earnings for Q3 that ended October 2025, Nvidia announced revenue of $57 billion, a 62% increase year-over-year, and going over Wall Street’s estimated $55 billion. Earnings went beyond expectations, as it reached $1.30 per share, which is up more than 60% from last year.
The semiconductor giant’s profits also surged to $31.9 billion, thanks to the massive growth that came out of its data center investments and businesses, as well as the increasing demand for its AI-powered chips, which alone was responsible for a record $51.2 billion in sales.
Additionally, this impressive report further indicated a positive outlook for the company’s Q4, as it predicts $65 billion in sales, well above what industry analysts are estimating.
What all of these financial achievements are doing is powerfully highlighting and reinforcing Nvidia’s dominance in the AI chip-production sector, where the American semiconductor giant commands roughly 80% to 90% share of accelerated computing solutions that are essential for AI workloads.
However, the dazzling results have done little to settle fears that a bubble may be inflating across the AI landscape, from chip-production to creating Agentic AI.
The AI Bubble Debate
The major market concern right now is that the explosive investment in AI companies, infrastructure, and hardware is disproportionately high relative to the genuine underlying economic value and profit realization at many tech firms.
It is why Nvidia itself is at the center of some of these worries, particularly given the so-called “circular” funding patterns that the company initiates in the AI market. Nvidia has invested billions and formed partnerships with leading AI startups like OpenAI and Anthropic, which in turn purchase chips and cloud services from major providers like Microsoft Azure, which also heavily relies on Nvidia technology.
What this means is that about 60% of Nvidia’s revenue now comes from just four customers, a concentration risk acknowledged by some investors that, if disrupted, could swiftly affect the company’s growth trajectory.
Popular investment banking company Goldman Sachs analysts also estimate this circular loop could account for up to 15% of Nvidia’s projected 2026 sales, which raises questions about how much of the demand is organic versus intentional capital cycling within the ecosystem.
Other industry analysts also echo that while AI innovation and adoption are real, the scale of speculative capital flowing into smaller, less proven companies already inflates AI valuations beyond sustainable levels.
Adding to this debate are remarks from industry leaders including OpenAI CEO Sam Altman, who also affirms that the AI market is exhibiting classic bubble symptoms.
He emphasized that while many intelligent people have projected the AI bubble to eventually happen and that they “may get overexcited about a kernel of truth,” it still doesn’t hold water over the long-term promise the technology holds.
“Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes,” Altman said in an interview with The Verge back in August.
Blowout Earnings From Nvidia Could Also Mean Other Things
Despite the increasing fear of an AI bubble, Nvidia’s CEO Jensen Huang dismisses these bubble concerns, pointing to the company’s impressive financial records and its expanding customer demand as proof of AI’s tangible impact.
“There’s been a lot of talk about an AI bubble,” Huang said at the company’s earnings call. “From our vantage point, we see something very different. As a reminder, Nvidia is unlike any other accelerator. We excel at every phase of AI, from pre-training and post-training to inference.”
Dan Ives, managing director and a senior equity research analyst at Wedbush Securities, also echoed this sentiment.
“Fears of an AI bubble are way overstated,” Ives said in a statement, where he further touted the blowout earnings as a “pop-the-champagne moment” for AI investors.
“This is another validation point for the AI revolution,” the senior analyst added. “We are in the top of the third inning of this AI game.”
Now, Nvidia’s earnings report and the AI bubble debate stands as a paradox at the heart of AI development and investment today. Nvidia’s financial performance undeniably demonstrates AI’s growing commercial footprint and the company’s grip on this critical technology.
However, in the shadows of these impressive figures lie looming questions about the durability of such unprecedented growth and whether current market bullishness may be an overexaggeration of the actual innovation cycle.
What remains to be seen is whether the debate over an AI bubble will continue to define the narrative of the development of AI at large.
