Economy

AI Stocks Fall Despite Strong Nvidia Report Amid Growing Bubble Concerns

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Nov 22, 2025

THE BARE STORY

U.S. tech and artificial intelligence stocks ended the week with significant losses as part of a broader market downturn. For the week, the S&P 500 and Dow Jones Industrial Average fell by approximately 2%, and the Nasdaq Composite declined 2.7%. The slide occurred despite a strong quarterly earnings report from chipmaker Nvidia on Wednesday, which beat estimates and raised its sales guidance, prompting a brief market rally that quickly faded.

The market volatility unfolded amid increasing investor fears about a potential AI bubble. Nvidia CEO Jensen Huang reportedly dismissed concerns about a bubble, stating his company had a different perspective. In contrast, Bridgewater’s Ray Dalio was said to have stated on Thursday that the market is "definitely in a bubble," while Dan Niles of Niles Investment Management claimed the market is "unquestionably in a bubble." Alphabet CEO Sundar Pichai reportedly warned that while excitement for the technology is rational, the industry can "collectively overshoot" during investment cycles.

Most major technology stocks declined over the week. Among the "Magnificent 7," Amazon and Microsoft fell 6% and 7% respectively, while Nvidia also posted a losing week. The sell-off extended to the broader chip sector, with Advanced Micro Devices and Micron both slumping more than 16%.

Alphabet was a notable exception, finishing the week with an 8% gain following the launch of its Gemini 3 AI model. According to one report, Google's market capitalization also surpassed that of Microsoft for the first time on Thursday. During an earnings call, Nvidia’s finance chief, Colette Kress, told analysts that expected large purchase orders from China did not materialize during the quarter, which she attributed to geopolitical issues and a competitive market.

Same Facts. Different Perspectives.

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• Key industry leaders are reporting strong performance and outlooks. Chipmaker Nvidia delivered a strong quarterly earnings report that beat estimates and included raised sales guidance. In response to market fears, Nvidia CEO Jensen Huang reportedly dismissed concerns about a bubble, stating that his company had a different perspective.

• Not all AI-related stocks are declining, suggesting selective investment. Alphabet was described as a "notable exception" to the sell-off, finishing the week with an 8% gain after launching its Gemini 3 AI model. The company's market capitalization also reportedly surpassed Microsoft's, indicating that investors are still rewarding specific innovation and performance.

• Some market challenges are being attributed to specific business factors. An expected sales shortfall from one major company was explained by specific circumstances rather than a general market collapse. Nvidia’s finance chief, Colette Kress, told analysts that anticipated large purchase orders from China did not materialize due to geopolitical issues and a competitive market.

How it may affect me

As a U.S. reader:

• Your retirement and investment accounts may see short-term value decreases, as the article notes broad market indices like the S&P 500 and Nasdaq have fallen.

• Market volatility and stated fears of an "AI bubble" can create uncertainty for personal investments, even when some companies report strong earnings.

• The performance of your tech investments could vary widely; Alphabet's stock rose while other major chipmakers and tech companies experienced substantial weekly losses.

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