Jensen Huang strives to dispel talk of an AI bubble; the market says, "The one selling shovels won't claim there's no gold in the hills!" Nvidia turns down during trading.

Jensen Huang strives to dispel talk of an AI bubble; the market says, "The one selling shovels won't claim there's no gold in the hills!" Nvidia turns down during trading.

```

Although Nvidia's third-quarter revenue surged 62% year-over-year to $57.01 billion and provided strong fourth-quarter guidance, investors' concerns about an AI valuation bubble have not completely disappeared.

On Thursday, Nvidia's stock reversed and fell during trading, after the company released an earnings report that beat expectations and once pushed the share price up by 5%.

After the earnings report, AI ecosystem-related stocks such as AMD and Broadcom were initially boosted, but then retreated along with the broader market. Deutsche Bank analyst Ross Seymore acknowledged the impressive performance but noted that the stock's "valuation is reasonable," maintaining a neutral rating.

Nvidia CEO Jensen Huang stated bluntly in the earnings call:

There’s a lot of discussion about an AI bubble, but from our perspective, the situation is completely different.

This statement attempts to dispel market doubts. However, analysts believe it is unrealistic to expect Jensen Huang to acknowledge the existence of a bubble—No “shovel seller” will ever tell gold miners there’s no gold in the hills.

Outstanding Performance but Controversy Remains

Nvidia’s latest earnings report exceeded even the most optimistic market expectations.

The company expects fourth-quarter revenue to reach about $65 billion, significantly higher than market forecasts. Even more notably, Jensen Huang revealed in his Washington speech that in the next six fiscal quarters, overseas sales for just the Blackwell and Rubin product lines will reach $500 billion.

Ben Barringer, global technology research director at Quilter Cheviot, said Nvidia “tried to refute almost every bearish argument” during the earnings call, including the expansion law, hyperscaler capex, and sovereign AI at all levels.

Wallstreetcn mentioned, for example, the market's concern over “circular financing” risks. Jensen Huang explained that strategic investments in companies like OpenAI and Anthropic are meant to deepen technological cooperation, expand the CUDA ecosystem, and acquire shares in “once-in-a-generation” companies, rather than the “circular transactions” the market worries about.

So-called circular financing refers to Nvidia investing in AI companies, which then use the funds to purchase Nvidia chips.

This year, Nvidia has made similar deals with dozens of companies including OpenAI, Microsoft, and Anthropic. In September alone, Nvidia announced a $10 billion investment in OpenAI to support new data centers and AI infrastructure.

Barringer said:

They (Nvidia executives) really did an excellent job addressing every elephant in the room, every possible bearish argument, and provided their own perspectives.

However, such defenses are seen by some market observers as inevitable.

Analysts believe it’s like a hardware store owner during a gold rush—he’ll never tell gold miners “there’s actually no gold in the mountains.” Even if the AI boom really is a bubble, as the biggest beneficiary, Jensen Huang will never admit it.

Bubble Debate Remains Unresolved

Investor concerns about an AI bubble do not target this quarter or the next few quarters, but focus on whether capital expenditures can continue to grow one or two years down the line. All these huge investments will eventually need to generate returns.

History provides valuable examples for reference.

During the dot-com bubble, Cisco, as a global network equipment provider, was once the most important “shovel seller” enterprise. While Cisco’s revenue growth did not reach Nvidia’s current level, it was still strong, even re-accelerating at one point—until the dot-com bubble burst and growth fell off a cliff.

Another reference is Apple. After the launch of the iPhone, Apple’s revenue growth around 2011 was comparable to Nvidia today. The difference is that when Apple reported over 50% revenue growth, its 12-month forward P/E ratio was only about 12 times, far below Nvidia’s current valuation.

Nvidia currently pays a quarterly dividend of one cent. At a pre-market share price of $195.60, shareholders would need nearly 4,900 years to recover their costs through dividends alone.

Analysts believe that if AI investment really is an unsustainable bubble, one cannot expect Jensen Huang to admit it, nor can it be seen in Nvidia’s current results or short-term outlook. The path of slowing growth will determine the trend of AI-themed stocks, but the causal relationship could be reversed—stock price volatility could in turn affect investment decisions.

Risk Warning and DisclaimerThe market is risky, and investment requires caution. This article does not constitute personal investment advice and does not take into account individual users’ specific investment objectives, financial situations, or needs. Users should consider whether any opinions, views or conclusions in this article are suitable for their specific circumstances. Investment based on this is at your own risk. ```