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Concerns Over AI Sector Bubble Threaten Nvidia
Growing concerns about a potential bubble in the AI sector of the stock market have arisen, particularly impacting Nvidia (NASDAQ: NVDA), the largest company by market cap. In Q3 FY 2026, Nvidia generated $57 billion in revenue, with $51.2 billion (90%) coming from data centers, heavily reliant on AI.
Industry analysts are drawing comparisons to the 2000s dot-com crash, citing high business valuations and potential overbuilding in AI. Despite Nvidia reporting being “sold out” of GPUs, the future of AI monetization remains uncertain. The profitability of many AI services is being criticized, as companies struggle to convert free users to paid subscriptions, raising questions about the long-term sustainability of AI investments.
If AI spending declines, Nvidia’s business could be substantially harmed, making it crucial for investors to monitor the sector’s ability to monetize AI advancements.
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