Nvidia Shares Fall 16% Amid AI Bubble Concerns Despite Earnings

Nvidia Corporation's shares have experienced significant volatility in late 2025, dropping more than 16 percent over the past two months amid concerns over an artificial intelligence bubble and rising competition, even as the company reported robust quarterly earnings and pursued strategic expansions.

The Santa Clara, California-based chipmaker, a leader in graphics processing units essential for AI applications, saw its stock fall more than 3 percent on Wednesday to a three-month low, part of a broader decline in AI-related chip stocks. Shares of competitors Advanced Micro Devices and Broadcom dropped 4 percent and 5 percent, respectively, that day. Nvidia's decline follows a peak valuation of over $5 trillion in late October, when it became the first company to reach that milestone. Despite the pullback, the stock has still outperformed the S&P 500 Index this year with a return of about 23.6 percent year-to-date.

The downturn comes despite Nvidia's strong financial performance. In its fiscal third quarter ending in October 2025, the company reported revenue of $57 billion, a 62 percent increase from the previous year and a $10 billion jump from the prior quarter. Earnings per...