New York: Concerns over an overheating artificial intelligence market have intensified this week as Nvidia, the world’s most valuable tech company, faces a series of high-profile investor exits and growing scepticism on Wall Street. The wave of withdrawals comes at a moment when markets are increasingly questioning whether the AI boom once considered unstoppable may now be approaching bubble territory.
Peter Thiel’s hedge fund, Thiel Macro LLC, has become the latest prominent investor to completely abandon Nvidia. Regulatory filings reveal that the fund sold its entire holding of 537,742 shares during the July–September quarter, a stake valued at nearly $100 million based on end-September prices. The liquidation is striking not only because of its size but because Nvidia previously accounted for around 40% of Thiel’s portfolio, making the sudden exit a signal of deep concern within elite financial circles.
The move mirrors a similar divestment by Japanese conglomerate SoftBank, which recently sold its remaining Nvidia shares worth roughly $6 billion to redirect capital toward potential ventures with OpenAI. The back-to-back exits of such influential players have intensified fears that the extraordinary surge in AI-related equities could be reaching an unsustainable peak.
Adding further tension to the market, famed contrarian investor Michael “The Big Short” Burry has disclosed short positions worth an estimated $1.2 billion against Nvidia and AI-software giant Palantir. His involvement has fueled the narrative that the AI rally is vulnerable, reinforcing doubts already circulating among analysts about the durability of massive infrastructure investments being made across the sector.
Market reactions have been swift. The tech-heavy Nasdaq has fallen 5% from its recent highs, while the S&P 500’s technology sector has slipped 7%, reflecting mounting unease. Nvidia’s own stock has retreated by 12% from its ₹212 peak, including a 1.9% drop during Monday’s trading and a further 0.7% decline after hours. The reversal underscores how sensitive investors have become to any sign of weakness in the AI supply chain.
These concerns have placed extraordinary weight on Nvidia’s upcoming earnings report, scheduled for release on November 19. Analysts expect quarterly revenue of around $56.8 billion, slightly above consensus estimates, but the stakes go far beyond a single earnings line. Nvidia is viewed as the backbone of the AI revolution, supplying the chips, servers and computing platforms that power generative AI, data centres and large-scale model deployments. Its performance has become a proxy for the health of the entire sector.
If Nvidia delivers strong results and raises forward guidance, analysts believe the AI investment cycle could accelerate once again, giving markets fresh momentum. Many on Wall Street remain optimistic, with 40 out of 47 analysts rating the stock a “strong buy” and pointing to its recent 56% year-on-year revenue growth and 61% rise in earnings as proof that demand for AI infrastructure remains robust.
But the risks are equally significant. If Nvidia misses even modest expectations or offers cautious guidance, the broader tech market could experience a sharp correction. Investors have voiced concerns that many firms are spending aggressively on AI infrastructure without clear returns, a gap that may become more visible if Nvidia signals slowing demand or supply-chain constraints. Any disappointment could deflate the narrative that has driven AI valuations to historic levels.
As investors await Wednesday’s results, several key indicators will be under close watch: revenue performance, guidance for future quarters, margin stability amid rising hardware costs, diversification of Nvidia’s customer base, and commentary on power limitations and data-centre scalability. These metrics will offer clues not only about Nvidia’s trajectory but about whether the AI revolution is entering a new phase or losing momentum.
With markets already showing signs of strain, Nvidia’s earnings day is shaping up to be a pivotal moment. The company’s performance may determine whether the AI boom enters a second wave of rapid expansion or faces its first major reckoning.