Chip giant Nvidia to report earnings as some warn of AI 'bubble'

Posted By: Ashley Smith
August 27, 2025 @ 2:45 pm
Local News

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Co-founder and chief executive officer of Nvidia Corp., Jensen Huang attends the 9th edition of the VivaTech trade show at the Parc des Expositions de la Porte de Versailles on June 11, 2025, in Paris. (Chesnot/Getty Images, FILE)

(NEW YORK) — An earnings report to be released by chip giant Nvidia on Wednesday will offer a window into the health of the artificial intelligence (AI) industry, which in recent years has become a key engine for stock market gains and economic growth.

Nvidia, the $4 trillion company behind many of the chips fueling AI products, has expanded at a breakneck pace since an AI boom set off by the release of OpenAI’s ChatGPT in 2022. The California-based company saw its stock price soar nearly 700% over the ensuing two years.

Analysts expect Nvidia to record $46.2 billion in revenue over three months ending in June, which would amount to a 53% jump compared to a year earlier. That would mark robust growth but it would come in well below a 122% spike in revenue enjoyed in the same quarter a year ago.

Alongside continued growth, the company is weathering new challenges. President Donald Trump barred the sale of chips to China earlier this year, before revoking the ban in July. A month later, Trump struck an agreement with Nvidia allowing the company to sell chips in China if the firm hands over 15% of revenue generated by the exports to the U.S.

Speaking at the White House earlier this month, the president recounted the agreement with Nvidia.

“I said, ‘If I’m going to do that, I want you to pay us as a country something, because I’m giving you a release,’” Trump said.

In May, the company said it expected to suffer an $8 billion loss as result of restrictions imposed upon chip exports.

In recent weeks, some prominent figures have warned of an AI bubble, casting doubt on the sustainability of the sector’s gangbusters growth. Torsten Sløk, chief economist at Apollo, said last month that the AI bubble may exceed the dot-com bubble of the 1990s, suggesting that the top firms are overvalued.

In an interview earlier this month, OpenAI CEO Sam Altman also said the AI industry had become a bubble.

“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 told tech publication The Verge.

Still, the AI sector remains a bright spot for the U.S. economy. AI-related spending added a 0.5 percentage point boost to annualized gross domestic product growth over the first half of 2025, Pantheon Macroeconomics found.